Best of the Week
Most Popular
1.Is the Stocks Bull Market Over? Dow Trend Forecast into End January 2015 - Nadeem_Walayat
2.Gold and Silver Stocks Apocalypse Now, Bear Market Review - Rambus_Chartology
3.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
4.Ebola Terror Threat Suicide Bio-Weapons Threatens Multiple 9/11's, Global Plague - Nadeem_Walayat
5.Second-Richest Man Says Mortgages Now a "No Brainer" - Dr. Steve Sjuggerud
6.Gold And Silver Still No End In Sight - Michael_Noonan
7.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
8.The Gold Bug is Set to Bite Back - EWI
9.How Alibaba Could Capitalize on the EBay-PayPal Split - Frank_Holmes
10.The Consequences of the Economic Peace - John_Mauldin
Last 5 days
U.S. Economy Faltering Momentum, Debt and Asset Bubbles - 23rd Oct 14
Annuities - Afraid Your Money Will Vanish before You Do? - 23rd Oct 14
What Debt Deleveraging? - 23rd Oct 14
How to Profit from Massive Spin-Offs with Just One Play - 23rd Oct 14
Evaluating Ebola as a Biological Weapon - 23rd Oct 14
Euro, USD, Gold and Stocks According to Chartology - 23rd Oct 14
Why You Should Always Be Invested in the Stock Market (Even Now) - 23rd Oct 14
Five U.S. Housing Market Warning Signs Point to Real Estate Market Downturn - 23rd Oct 14
The Better Short: Gold or Silver? - 23rd Oct 14
Focus on Graphite Companies with Green Energy and Technology Strategies - 22nd Oct 14
Crude Oil Price Hitting Bottom - 22nd Oct 14
Evidence of Another Even More Sweeping U.S. Housing Market Bust Already Starting to Appear - 22nd Oct 14
Gold Or Crushing Paper Debt Stocks Crash? - 22nd Oct 14
India Gold Demand Surges 450% and Bank of Russia Demand At 15 Year High - 22nd Oct 14
Bitcoin Stock Exchange Could Be "More Valuable than Alibaba" - 22nd Oct 14
Currency War - How to Profit from a Stronger U.S. Dollar - 22nd Oct 14
Banks Hold Treasuries and Make Loans- 22nd Oct 14
Gold and Silver Timing is Everything - 22nd Oct 14
Don't Get Ruined by These 10 Popular Investment Myths (Part VII) - 22nd Oct 14
Follow the Baby Boom to Biotech Stock Profits - 22nd Oct 14
Copper, Nickel and Zinc Won't Be Cheap for Long - 22nd Oct 14
How Will We Know That the Gold & Silver Price Bottom Is In? - 21st Oct 14
Is Gold as Dead as Florida Hurricanes? - 21st Oct 14
First Swiss Gold Poll Shows Pro-Gold Side In Lead At 45% - 21st Oct 14
The Similarities Between Germany and China - 21st Oct 14
The REAL Reason Why the Stock Market Turned Down - 21st Oct 14
Petrobras is a 'Scheme, Not a Stock' - 21st Oct 14
Stocks Bear Market Indicator Is Off the Mark - 20th Oct 14
Stock Market Ideal Turning Point is at Hand - 20th Oct 14
Investors Quit Complaining, The Environment is Perfect Right Now - 20th Oct 14
Ebola Armageddon Could Trigger a Rebirth in Gold and Silver Prices - 20th Oct 14
Gold vs Euro Risk Due To Possible Return of Italian Lira - Drachmas, Escudos, Pesetas and Punts? - 20th Oct 14
Stocks Rebounded Following Recent Sell-Off, But Will It Last? - 20th Oct 14
U.S. Responsible for West Africa Ebola Outbreak Says Liberian Scientist - 20th Oct 14
Stock Market Intermediate B Wave has Started - 20th Oct 14
Gold Stocks Analysis – FNV, CG, NCM, SBM - 19th Oct 14
Stock Market Primary IV Wave Counter Trend Rally - 19th Oct 14
Gold And Silver - Financial World: House Of Cards Built On Sand - 18th Oct 14
Anatomy of a Stock Market Sell-Off - 18th Oct 14
Why OPEC Has Declared an Oil War on Russia - 18th Oct 14
Gold and Silver Extreme Shorting Peaks - 18th Oct 14
Bitcoin Price Fall to $350? - 18th Oct 14
Tesco Supermarket Crisis Worse To Come as Customers Vanish! - 18th Oct 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stocks Epic Bear Market

Gold and Silver Under Pressure Ahead of Year-End

Commodities / Gold and Silver 2012 Dec 27, 2012 - 11:21 AM GMT

By: Ben_Traynor

Commodities

U.S. DOLLAR gold prices traded above $1650 an ounce Thursday morning, in line with where they started the week, as the London market reopened following Christmas.

Silver meantime hovered either side of $30 an ounce, while stock markets edged higher and the Dollar fell, following news that the US Treasury is to take extraordinary measures to avoid hitting the federal debt ceiling next Monday.


"I am still friendly with the [precious metals] market, but it looks like until the new year starts, it's under pressure," says Yuichi Ikemizu at Standard Bank in Tokyo.

US president Barack Obama has flown back early from Hawaii to resume talks on the so-called fiscal cliff, the $600 million of spending cuts and tax cut expiries due to come into effect from Monday. The House of Representatives remains on vacation.

"The Senate must act first" said a statement issued Wednesday by House speaker John Boehner and senior Republican colleagues.

"The House will then consider whether to accept the bills...or to send them back to the Senate with additional amendments."

Boehner's so-called 'Plan B' for dealing with the federal deficit, which included maintaining tax cuts for anyone earning less than $1 million, failed to reach a House vote last week due to lack of support from members of Boehner's own party.

The US Treasury meantime is to take extraordinary measures to avoid hitting the statutory federal debt limit next Monday, a letter from Treasury secretary Timothy Geinther published yesterday says.

The measures include a halt to issuing debt for the purposes of assisting state and local governments, and suspending reinvestment of maturing securities into funds for government workers and the Exchange Stabilization Fund, an emergency fund set up for the purpose of exchange rate intervention.

"These extraordinary measures...can create approximately $200 billion in headroom under the debt limit," Geithner's letter says.

"Under normal circumstances, that amount of headroom would last approximately two months.

However, given the significant uncertainty that now exists for unresolved tax and spending policies for 2013, it is not possible to predict the effective duration of these measures."

The measures will "postpone the date that the United States would otherwise default on its legal obligations," the letter adds.

The US Treasury has taken similar measures on a number of occasions over the last two decades, including a series of measures starting in May 2011 that ended when the debt ceiling was last extended.

The 2011 debt ceiling negotiations lasted until August 2 of that year, the date the Treasury had said the US would hit the ceiling. Ratings agency Standard & Poor's stripped the US of its triple-A credit rating a few days later.

"Progress on the fiscal cliff will continue to affect market sentiment," Feng Liang, analyst at GF Futures, part of China's third-biggest listed brokerage, told news agency Bloomberg yesterday.

"Gold's one of the few investments with positive returns this year and it's normal to get some [year-end selling]."

The gold price at Thursday morning's London Fix was $1655.25 an ounce, 5.1% up on the final fixing of 2011.

Over in India, gold demand stayed strong Thursday, newswire Reuters reports.

"Retail demand is still weak, but jewelers are restocking for Pongal festival," says Daman Prakash Rathod, director at Chennai wholesaler MNC Bullion, referring to next month's harvest festival in the state of Tamil Nadu.

By Ben Traynor
BullionVault.com

Gold price chart, no delay   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Ben Traynor Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014