Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
S&P SEASONAL ANALYSIS - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Erases Week's 2.5% Gain After UK Rejects Syrian Action

Commodities / Gold and Silver 2013 Aug 30, 2013 - 06:45 PM GMT

By: Adrian_Ash

Commodities

The PRICE of gold fell $15 in London trade Friday morning, reversing the last of the week's 2.5% gain to sit flat at $1395 per ounce.

Silver had already slipped, and then also fell hard as London opened for business, dipping below $23.50 per ounce.



Unlike the gold price silver then regained most of that drop to trade back at $23.70 – some 1.7% beneath last Friday's finish.

"A delay in any military action in Syria has temporarily pushed demand for gold as a safe haven to the backburner," says a note from Germany's Commerzbank.

"My feeling," says David Govett at brokers Marex Spectron, "is that without Syria [the gold price] would be sub-1400.

"[But] with that simmering in the background, the majority [of traders] are nervous of being short."

After losing a key vote on Syria last night, British prime minister David Camerson said the UK will not join any action against the Assad regime over alleged chemical weapon attacks on civilians.

Just as the result was being announced in Parliament, a BBC team in Syria reported a fighter jeg dropping incendiary bombs on a school playground, causing "napalm-like burns" on scores of children.

"Any sign that the situation may be contained," says Swiss bank and London market maker UBS, "will keep the focus on the macro picture for now.

"This remains challenging for the [gold price]."

Ahead of key US data on inflation and personal spending, major government bonds ticked lower in price, nudging interest rates higher.

Investors in major government bonds were heading for a fourth month of losses, Bloomberg reports, with US as well as Japanese, UK and Eurozone debt prices all falling in August.

US stock-market futures meantime pointed higher as European shares cut earlier losses. Commodity indices retreated 0.5% as US crude oil fell back towards $108 per barrel.

"There's fear the Fed will cut stimulus [in September], while improving economic data in Europe is having a further upward effect on yields," says Alain van der Heijden at the €1.4 billion Kempen Capital Management in Amsterdam.

But "I see the current [emerging market] turbulence leading to a renewed global recession," counters Societe Generale strategist Albert Edwards, "with waves of deflation flowing to the west from Asia."

Rather than tapering, "QE will be ramped up exponentially," says Edwards, repeating his four-year call for a $10,000 gold price as "inflation is unlikely to be containable."

Suffering a 20% drop in the Rupee since mid-July, India's prime minister Manmohan Singh on Friday blamed "unexpected external developments", and repeated that "clearly, we need to reduce our appetite for gold."

Gold investment – primarily met through imports rather than domestic mine supply or recycling – accounted for 2% of GDP in the last fiscal year, the Reserve Bank of India said last week, down from 2.4% in the prior year.

Gold trading margins at the Multi Commodity Exchange will double on Monday to address volatility in gold futures, where prices this week hit fresh all-time highs.

Following Turkey's lead in using household gold bullion deposits to boost national gold reserves, India is planning to launch "gold banking" soon, according to unnamed sources quoted by the press.

Reviewing the level of external debt amongt Asian countries, however, "I’m relatively though not totally calm," writes Princeton economist Paul Krugman on his New York Times blog.

"Indonesia has a much lower debt ratio now, about half what it was in the mid-90s. India's external debt level is [also] relatively low."

Over on the supply side Friday, producers in world #6 miner South Africa said they'd received 48 hours notice of a strike over pay from the largest and government-aligned union, the National Union of Mineworkers.

"Our most important industry is in crisis and we have not yet found the answer to stemming the tide of destruction," said a tearful Mark Cutifani, CEO of Anglo American, blaming "cowards, thugs and murderers" for a wave of violence across South Africa's gold mining industry.

Now running Amplats as a division of Anglo, Cutifani said job cuts will be limited to 4,800 rather than the 14,000 previously targeted at the world's #1 platinum producer.

By Adrian Ash
BullionVault.com

Gold price chart, no delay   |   Buy gold online at live prices

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich, Switzerland for just 0.5% commission.

(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.

Adrian Ash Archive

© 2005-2022 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