Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Stock Market Investors’ Limitless Risk Appetite - 27th Jan 21
3 Dividend Paying Stocks to Ride the New Housing Boom - 27th Jan 21
Biden Seeks Huge Spending, Globally Coordinated Tax Hikes - 27th Jan 21
Will Inflation Make Gold Shine in 2021? - 27th Jan 21
Amazon AI Stocks Investing Analysis 2021 - 27th Jan 21
Why You Shouldn’t Get Excited About Gold Price Mini-Rally - 26th Jan 21
The Truth About Personal Savings Everybody Should Know and Think About - 26th Jan 21
4 Economic Challenges for 2021 - 26th Jan 21
Scan Computers 2021 "Awaiting Picking" - 5950x RTX 3080 Custom PC Build Stock Status - 26th Jan 21
The End of the World History Stock Market Chart : Big Pattern = Big Move - 26th Jan 21
Stock Market Recent Sector Triggers Suggest Stocks May Enter Rally Phase - 26th Jan 21
3 Top-Performing Tech Stocks for 2021 - 26th Jan 21
5 Tips to Manage Your Debt - 26th Jan 21
Stock Market Intermediate Trend Intact - 25th Jan 21
Precious Metals Could Decline Before their Next Attempt to Rally - 25th Jan 21
Great Ways of Choosing Good CMMS Software for a Business - 25th Jan 21
The Dark Forces behind American Insurrectionists - 25th Jan 21
Economic Stimulus Doesn’t Always Stimulate – Pushing On A String - 25th Jan 21
Can Karcher K7 Pressure Washer Clean a Weed Infested Driveway? Extreme Power Test - 25th Jan 21
Lockdown Sea Shanty Craze - "Drunken Sailor" on the Pirate Falls Crazy Boat Ride - 25th Jan 21
Intel Empire Fights Back with Rocket and Alder Lake! - 24th Jan 21
4 Reasons for Coronavirus 2021 Hope - 24th Jan 21
Apple M1 Chip Another Nail in Intel's Coffin - Top AI Tech Stocks 2021 - 24th Jan 21
Stock Market: Why You Should Prepare for a Jump in Volatility - 24th Jan 21
What’s next for Bitcoin Price – $56k or $16k? - 24th Jan 21
How Does Credit Repair Work? - 24th Jan 21
Silver Price 2021 Roadmap - 22nd Jan 21
Why Biden Wants to Win the Fight for $15 Federal Minimum Wage - 22nd Jan 21
Here’s Why Gold Recently Moved Up - 22nd Jan 21
US Dollar Decline creates New Sector Opportunities to Trade - 22nd Jan 21
Sandisk Extreme Micro SDXC Memory Card Read Write Speed Test Actual vs Sales Pitch - 22nd Jan 21
NHS Recommends Oximeter Oxygen Sensor Monitors for Everyone 10 Months Late! - 22nd Jan 21
DoorDash Has All the Makings of the “Next Amazon” - 22nd Jan 21
How to Survive a Silver-Gold Sucker Punch - 22nd Jan 21
2021: The Year of the Gripping Hand - 22nd Jan 21
Technology Minerals appoints ex-BP Petrochemicals CEO as Advisor - 22nd Jan 21
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold Cycle "Could Turn This Year" Says Goldman Sachs

Commodities / Gold and Silver 2013 Jan 16, 2013 - 03:32 PM GMT

By: Ben_Traynor

Commodities

THE DOLLAR gold price eased back below $1680 an ounce Wednesday morning, though it remained well within its trading range for the past month, while stock markets extended their losses for this week and US Treasuries gained.

Silver hovered around $31.30 an ounce for most of this morning, also in line with its recent trading range, while other commodities were similarly flat.


"In the short term, the combination of weaker growth and the run up to the debt ceiling and potential budget sequestration should prove supportive to gold prices," says a note from Goldman Sachs this morning.

"[However] improving US growth will outweigh further Fed[eral Reserve] balance sheet expansion...the cycle in gold prices will likely turn in 2013."

Federal Reserve Bank of Kansas president Esther George warned last week that the Fed's accommodative policies could make it difficult to hit the Fed's 2% inflation target, while St Louis Fed president James Bullard argued against linking asset purchases to economic variables such as unemployment.

Yesterday however, Minneapolis Fed president Narayana Kocherlokata said the Fed "should provide more monetary accommodation" and argued for an unemployment rate target of 5.5% – one percentage point lower than the 6.5% target announced last month.

"Continued monetary accommodation is absolutely appropriate," added Boston Fed president Eric Rosengren Tuesday, "and indeed needed as long as we are projected to miss on both elements of the Fed's dual mandate, inflation and employment."

Bullard, George and Rosengren are all voting members of the Federal Open Market Committee this year while Kocherlakota is not.

Fed chairman Ben Bernanke warned Monday of "critical watersheds" for US fiscal policy in the weeks ahead. US politicians are yet to reach an agreement to prevent spending cuts postponed to the start of March as part of the deal on the so-called fiscal cliff earlier this month. Negotiations are also expected on the federal budget and the debt ceiling.

"Washington's activities will keep gold nervous in the next few weeks," writes Rhona O'Connell, senior analyst at Thomson Reuters GFMS, in the metals consultancy'squarterly newsletter.

"As well as frequently being sold in times of short-term distress, gold has often experienced longer periods when it has suffered in line with a bearish commodities sector as investors have become risk averse; the much longer-term view, however, still points to gold maintaining a role as a hedge against risk. Its short-term characteristics often, therefore, appear to be in conflict with its longer-term role."

Britain's banking system meantime "is in a stretched position", Bank of England governor Mervyn King warned yesterday.

"A combination of a weak [economic] recovery and...people searching for yield in ways that suggest that risk isn't fully priced is a disturbing position," King told members of parliament on the House of Commons Treasury Committee.

"In the context of the UK," says a note from Standard Bank analyst Steve Barrow, "one such 'risk' would seem to be a ratings downgrade, which we feel is likely to occur some time this year. But while King might have been referring to the UK, the question is just as valid on a global level."

The Euro meantime is "dangerously high", according Jean-Claude Juncker, chairman of the Eurogroup of single currency finance ministers.

The Euro has fallen back a little this week after touching an eleven-month high against the Dollar on Monday, although it rallied this morning following the publication of data showing so-called 'core' consumer inflation rose slightly last month.

"Those comments from Juncker suggests that euro zone politicians are gearing up for some rearguard action and responding to the rhetoric we have had from Japan," says Neil Mellor, currency strategist at Bank of New York Mellon, referring to comments from Japan's prime minister Shinzo Abe, who has urged the Bank of Japan to be more aggressive in fighting deflation.

In South Africa, workers at Anglo American Platinum's Rustenburg mine refused to go underground last night, following news that AmPlats plans to cut 14,000 jobs from a total of 60,000 employees.

Shares in the London-listed platinum miner, the world's biggest producer, were the heaviest fallers on the FTSE 100 this morning, dropping more than 3% by lunchtime.

South Africa's platinum industry saw a series of strike actions last year, which also affected the gold mining sector. The country's gold output fell 32.2% in November compared to the same point a year earlier, data published Tuesday by Statistics South Africa show.

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 2013

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

© 2005-2019 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

6 Critical Money Making Rules