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
AI Tech Stocks Buy Ratings, Levels and Valuations - 14th Apr 21
Easy 10% to 15% Overclock for 5600x, 5900x, 5950x Using AMD Ryzen Master Precision Boost Overdrive - 14th Apr 21
The Current Cannabis Sector Rally Is Pointing To Another Breakout - 14th Apr 21
U.S. Dollar Junk Bond Market The Easiest Money in History - 14th Apr 21
The SPY Is Nearing Resistance @ $410… What Is Next? - 14th Apr 21
The Curious Stock Market Staircase Rally - 14th Apr 21
Stocks are Heating Up - 14th Apr 21
Two Methods in Calculating For R&D Tax Credits - 14th Apr 21
Stock Market Minor Correction Due - 13th Apr 21
How to Feed Budgies Cucumbers - Best Vegetables Feeding for the First Time, Parakeet Care UK - 13th Apr 21
Biggest Inflation Threat in 40 Years Looms over Markets - 13th Apr 21
How to Get Rich with the Pareto Distribution - Tesco Example - 13th Apr 21
Litecoin and Bitcoin-Which Is Better? - 13th Apr 21
The Major Advantages Of Getting Your PhD Online - 12th Apr 21
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21
The History of Bitcoin Hard Forks - 10th Apr 21
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21
Investing in Google Deep Mind AI 2021 (Alphabet) - 6th Apr 21
Which ETFs Will Benefit As A Stronger US Dollar Reacts To Global Market Concerns - 6th Apr 21
Staying Out of the Red: Financial Tips for Kent Homeowners - 6th Apr 21
Stock Market Pushing Higher - 6th Apr 21
Inflation Fears Rise on Biden’s $3.9 TRILLION in Deficit Spending - 6th Apr 21
Editing and Rendering Videos Whilst Background Crypto Mining Bitcoins with NiceHash, Davinci Resolve - 5th Apr 21
Why the Financial Gurus Are WRONG About Gold - 5th Apr 21
Will Biden’s Infrastructure Plan Rebuild Gold? - 5th Apr 21
Stocks All Time Highs and Gold Double Bottom - 5th Apr 21
All Tech Stocks Revolve Around This Disruptor - 5th Apr 21
Silver $100 Price Ahead - 4th Apr 21
Is Astra Zeneca Vaccine Safe? Risk of Blood Clots and What Side Effects During 8 Days After Jab - 4th Apr 21
Are Premium Bonds A Good Investment in 2021 vs Savings, AI Stocks and Housing Alternatives - 4th Apr 21
Penny Stocks Hit $2 Trillion - The Real Story Behind This "Road to Riches" Scheme - 4th Apr 21
Should Stock Markets Fear Inflation or Deflation? - 4th Apr 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