Best of the Week
Most Popular
1.Crude Oil Price Trend Forecast 2016 Update - Nadeem_Walayat
2.Will Deutsche Bank Crash The Global Stock Market? - Clif_Droke
3.Gold Price In Excess Of $8000 While US Dollar Collapses - Hubert_Moolman
4.BrExit UK Economic Collapse Evaporates, GDP Forecasts for 2016 and 2017 - Nadeem_Walayat
5.Gold Stocks Massive Price Correction - Zeal_LLC
6.Stock Market Predicts Donald Trump Victory - Austin_Galt
7.Next Financial Crisis Will be Far Worse than 2008/09 - Chris_Vermeulen
8.The Gold To Housing Ratio As A Valuation Indicator - Dan_Amerman
9.GDXJ Gold Stocks - A Diamond in the Rough - Rambus_Chartology
10.Gold Boom! End Game Nears As Central Banks Buying Up Gold Mining Companies! - Jeff_Berwick
Last 7 days
BoJ, FOMC and Where To Now? - 26th Sept 16
Stock Market New All Time Highs Next - 26th Sept 16
Why Trump Will Win US General Election 2016 Prediction Forecast - 26th Sept 16
Martial Law Rolls Out Across the US As Jubilee Nears - 26th Sept 16
Stock Market More Correction Likely - 25th Sept 16
US Presidential Election Forecast 2016 - Trump Riding BrExit Wave into the White House - 25th Sept 16
US Economy GDP Growth Estimates in Free-Fall: FRBNY Nowcast 2.26% Q3, 1.22% Q4 - 24th Sept 16
Gold and Gold Stocks Corrective Action Continues Despite Dovish Federal Reserve - 24th Sept 16
Global Bonds: Why Our Analyst Says Things Just Got "Monumental" - 24th Sept 16
Where Did All the Money Go? - 23rd Sept 16
Pension Shortfalls Could Be 4X To 7X Greater Than Reported - 23rd Sept 16
Gold Unleashed by the Fed - 23rd Sept 16
Gold around U.S Presidential Elections - 23rd Sept 16
Here’s Why Eastern Europe Is Doomed - 23rd Sept 16
Nasdaq NDX 100 Big Cap Tech Breakout ? - 23rd Sept 16
The Implications of the Italian Banking Crisis Could Be Disastrous - 22nd Sept 16
TwinLakes Theme Park Summer Super 6 FREE Return Entry for Real? - 21st Sept 16
Has the Silver Bullet Run Out of Fire Power? - 21st Sept 16
Frack Sand: The Unsung Hero Of The OPEC Oil War - 21st Sept 16
What’s Happening With Gold? - 21st Sept 16
Gold vs. Stocks and Commodities, Pre-FOMC - 20th Sept 16
BrExit UK Inflation CPI, RPI Forecast 2016, 2017 - 20th Sept 16
European banks may be more important than the Fed this week - 20th Sept 16
Gold, Silver, Stocks and Bonds Grand Ascension or Great Collapse? - 20th Sept 16
Mass Psychology in Action; Instead of Selling Gilead it is Time to Take a Closer Look - 20th Sept 16
Hillary - Finally Well Deserved Recognition for Deplorables - 20th Sept 16
Fascist Business Model: Reich Economics - 19th Sept 16
Multiweek Correction in Gold and Silver Markets Continues - 19th Sept 16
Stock Market May Turn Ugly This Week - 19th Sept 16
China Is Digging Itself into a Deeper Hole - 19th Sept 16
Yellen’s Footnote 8 Would Put Interest Rates on Autopilot - 19th Sept 16
Central Bank Digital Currencies: A Revolution in Banking? - 19th Sept 16
UK Government Surrenders to China / France to Build Nuclear Fukushima Plant At Hinkley Point C - 19th Sept 16
Stock Market Correction Already Over? - 18th Sept 16
American Economics - 18th Sept 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Power of the Wave Principle

Gold Could Test Resistance After Consolidation

Commodities / Gold and Silver 2013 Feb 05, 2013 - 03:33 PM GMT

By: Ben_Traynor

Commodities

WHOLESALE MARKET gold bullion prices rose above $1680 an ounce Tuesday morning in London, trading close to last week's high, as stocks, commodities and the Euro also gained and US Treasuries fell, following better-than-expected services sector data from Europe.

Silver meantime touched $32 an ounce for the first time this week.

"We will remain short term bearish [on gold] while resistance [around $1696 per ounce] caps," says Axel Rudolph, senior technical analyst at Commerzbank.


"Should this resistance zone unexpectedly be overcome, however, our medium term bullish forecast will be reinstated with the 1750 region then being targeted."

"The January 4 low at $1625 is pivotal," add technical analysts at Scotia Mocatta,"and there should be good support there...the consolidation since that date may indicate gold is forming a base."

Sentiment towards gold among western households grew less bullish last month, according to data published by BullionVault Tuesday.

The Gold Investor Index, which tracks buying and selling on the world's largest physical gold market for private investors online, fell to 54.9 in January, down from a 12-month high of 58.3 a month earlier and its lowest reading since September. A figure above 50 indicates more net buyers than net sellers over the month.

Weekly data published by the Commodity Futures Trading Commission last Friday meantime show the speculative net long position of gold futures traders, a closely-watched measure of futures market sentiment, fell to levels not reported since August during the week ended last Tuesday, indicating reduced bullishness among traders.

Over in India, traditionally the world's biggest source of private gold demand, the government's "anti-gold" stance means Indian gold demand "is going to face a difficult year", according to Philip Klapwijk, global head of metal analytics at precious metals consultancy Thomson Reuters GFMS.

"Comparing demand last year with 2011, we see this rather strange phenomenon that India was the standout for the country where demand collapsed the most," Klapwijk told a conference in cape Town Monday.

"In other parts of the world, they shrugged off the 6% increase in gold prices rather well and in other parts we saw growth in jewelry demand."

Gold bullion imports to China through Hong Kong nearly doubled in 2012, hitting a record 834.5 tonnes, the island's Census & Statistics Department said today.

Now the world's largest gold consumer as well as the number one mining producing nation, however, China also trebled its exports of gold through Hong Kong, the data show.

Gold bullion imports net of exports rose 56.0% to 523.6 tonnes on BullionVault's maths.

China's central bank meantime injected a record 450 billion Yuan ($72 billion) into the country's money markets Tuesday ahead of next week's Lunar New Year holiday.

Bank of Japan governor Masaaki Shirakawa announced Tuesday that he will step down three weeks earlier than scheduled, and will now leave his post on March 19.

At its most recent policy meeting, the BOJ doubled its inflation target from 1% to 2% and announced it will launch open ended quantitative easing once the current round of QE ends next year.

The BOJ's move was largely expected, having been called for by prime minister Shinzo Abe following his election victory in December, and was described as "threatening an end to central bank autonomy" by the head of Germany's Bundesbank Jens Weidmann.

"[Shirakawa's] resignation will likely push forward the timing of bold monetary easing action [by the BOJ," reckons Akito Fukunaga, chief rates strategist at RBS Securities Japan in Tokyo.

"Shirakawa has probably judged that it's better for the BOJ to start with a new top three who have similar views."

In Europe, the services sectors of Germany, Spain and the Eurozone as a whole all saw better-than-expected improvements in conditions last month, according to monthly purchasing managers' index data published this morning, although the PMIs for Spain and the Eurozone remained below 50, indicating sector contraction.

Italy's services PMI by contrast was lower than the consensus forecast among analysts, and down on the month earlier, indicating a sharper rate of contraction during the month.

In the UK, January's services PMI was 51.5, up from 48.9 a month earlier.

"A huge sigh of relief accompanies these numbers, as a return to growth of the service sector in January greatly reduces the likelihood of the UK falling back into a 'triple-dip' recession," says Chris Williamson, chief economist at Markit, which produces the PMI.

Both the Euro and Sterling rallied against the Dollar this morning, although Sterling reversed most of the move by lunchtime. Both currencies remain below where they started the month.

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

© 2005-2016 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