Best of the Week
Most Popular
1.The Trump Reset, US Empire's Coming Economic, Cyber and Military War With China (2/2) - Nadeem_Walayat
2.Now Is the Time to Buy Gold - 5th Jan 17 - John Grandits
3.CIA Planning Rogue President Donald Trump Assassination? Elites "Manchurian Candidate" Plan B - Nadeem_Walayat
4.The Trump Reset - Regime Change, Russia the Over Hyped Fake News SuperPower (Part1) - Nadeem_Walayat
5.Most Popular Financial Markets Analysis of 2016 - Stock Market Crash Postponed Again - Nadeem_Walayat
6.No UK House Prices Brexit Crash 2016 Despite London Weakness, Forecast 2017 - Nadeem_Walayat
7.President Trump Understands the NSA, CIA... LIE, America's Intelligence Agencies Crime Syndicate! -Nadeem_Walayat
8.President Donald Trump's 2017 New Year Message, BBC Fake News, Was 2016 a Dream? - Nadeem_Walayat
9.Major Stocks Bear Market Still Looms - Zeal_LLC
10.Biased 2017 Forecasts - Debt, Housing and Stock Market (1/2) - James_Quinn
Last 7 days
Stock Market Trading Patience Pays Off with CHK Using Momentum Reversals - 19th Jan 17
Gold - How to "Buy Low and Sell High" Like a Pro - 19th Jan 17
State of the Global Stock, Financial and Commodity Markets Report 2017 - 19th Jan 17
The Hunt for Russia's Next Enemy - 18th Jan 17
Returning Gold Bulls - 18th Jan 17
Biotech Breakthrough Could Create A $11.4 Trillion Opportunity - 18th Jan 17
Bitcoin and Gold - Outlook, Volatility and Safe Haven Diversification - 17th Jan 17
Stock Market Uptrend on Borrowed Time - 17th Jan 17
The One Stock to Retire On - 17th Jan 17
Trump anti-Communist Counter Revolution - 17th Jan 17
US Stock Market Update as the Trump Inauguration Approaches - 17th Jan 17
The American Crisis - Common Sense 2017 - 17th Jan 17
Obama Leaves, Hope Arrives, Will Stupid Stay? - 17th Jan 17
Damage Inflicted by Precious Metals Manipulation Is in the “Multi Billions” - Keith Neumeyer - 17th Jan 17
Gold Price Forecast 2017 Update - Video - 17th Jan 17
The Story of the U.S. Regime Change Plan in the Philippines - 16th Jan 17
Gold Price 2017 Trending Towards $1375 as Forecast - 16th Jan 17
'Deep State' CIA Director States We are Not NAZI's, Warns Trump Does Not Understand Russian Threat - 15th Jan 17
UK House Prices Forecast 2017 - Crash or Bull Market? - Video - 15th Jan 17
SPX Stocks Bull Market Update - 14th Jan 17
President Trump vs the Deep State that Hides in Plain Sight - 14th Jan 17
The Impact of Sir Alex Ferguson's Retirement on Man United's Share Price - 14th Jan 17
What Can Stock Market Tell You About Politics? - 13th Jan 17
Big Gold Buying Coming 2017 - 13th Jan 17
A Bullish Case for Gold 2017 - 13th Jan 17
Will Stocks Bull Market Continue to Charge or is it Time to Sell the News - 13th Jan 17
Gold and Silver Off To Shining Start to 2017 - 13th Jan 17
Gold’s Fundamental Outlook for 2017 - 13th Jan 17
Is trading stocks and shares just as luck-based as roulette? - 13th Jan 17
Trump CIA Like Nazi Germany - Fake MI6 Intelligence leaked to Fake News Mainstream Media - 13th Jan 17
USD in Decline. SPX and TNX May Follow - 12th Jan 17
CIA War On Trump - Leaks Fake MI6 Intelligence to Fake News Broadcast Media - 12th Jan 17

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

State of Global Markets 2017 - Report

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

© 2005-2016 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

Catching a Falling Financial Knife