Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Being Strongly Influenced by Technicals

Commodities / Gold and Silver 2013 Mar 13, 2013 - 04:18 PM GMT

By: Ben_Traynor

Commodities

U.S.DOLLAR gold prices ticked higher to $1597 per ounce Wednesday morning, holding gains from a day earlier, as the Dollar fell against the Euro despite warnings from a prominent Eurozone policymaker that the crisis in the region is not over.

Gold in Euros rose to its highest level this month at €1229 an ounce, in contrast with gold in Sterling, which failed to move back above £1070 an ounce as the Pound recovered some ground against the Dollar after hitting a fresh two-and-a-half-year low yesterday.


Silver dipped briefly below $29 an ounce this morning before rallying 20¢, while stock markets ticked lower, commodities were broadly flat and US Treasury bonds gained.

A day earlier, gold climbed above $1590 an ounce for the first time in March Tuesday after Bundesbank chief Jens Weidmann said he does not believe the Eurozone crisis is over.

A number of analysts have suggested the speed of yesterday's move reflected so-called short covering of gold positions, whereby traders who have bet on the price of gold falling cover themselves as it rises by taking bets in the opposite direction i.e. buying gold.

"The price rise yesterday will not sustain as there was no major change in fundamentals," reckons Jinrui Futures analyst Chen Min in China.

"We'll see strong influence from technicals on prices as there isn't much data on the plate this week."

Speaking publicly again Wednesday, Weidmann told an audience in Cologne that European governments are "not giving clear direction" and reiterated yesterday's comments that an end to crisis "is not in sight".

Weidmann also said it does not make sense "to speculate about individual countries leaving the Euro area", having been asked about a comment from a German politician last week who suggested Italy may exit the single currency.

"In fact, Italy's already out of the Euro," Italian comedian-turned-politician Beppe Grillo, whose Five Star movement won the biggest share of the vote in last month's Italian election, says in an interview published by German newspaper Handelsbaltt Wednesday.

Northern European countries, he adds, will keep Italy in the Euro "until they are able to get back the funds their banks invested in Italian government bonds. Then they will drop us like a hot potato."

China can only invest around 1% to 2% of its foreign currency in gold as the market is too small to invest any more, the deputy governor of the central bank and head of the State Administration of Foreign Exchange (SAFE), Yi Gang, told reporters Wednesday. Yi added however that gold is always an option for China.

In January, SAFE created a new unit, the SAFE Co-Financing office, tasked with exploring new investments through which to diversify China's $3.3 trillion of foreign exchange reserves.

Two percent of this would equate to just under 1300 tonnes of gold at today's price, more than the 1054.1 tonnes the World Gold Council reports in its latest World Official Gold Holdings. China however does not regularly report when it adds to its official reserve, and has not reported how much gold it holds since 2009.

China's Renminbi currency, along with Australian assets and gold, "emerge as the most important assets for diversification" for central bank reserves, according to a report published this morning by the World Gold Council.

Using portfolio optimization analysis the authors of the report, 'Central bank diversification strategies: rebalancing from the Dollar and the Euro', found that "gold received a prominent 8% allocation, surpassing the 4% allocation to Renminbi and 3% to Australian assets.

"Gold's allocation," the report adds, "was matched only by Japanese Yen which was also weighted at 8% of the optimized portfolio."

The latest World Official Gold Holdings shows that the top three nations by size of official gold reserves, the US, Germany and Italy, have 75.6%, 72.7% and 72.2% of their reserves as gold respectively.

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