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
Friday Stock Market CRASH Following Israel Attack on Iranian Nuclear Facilities - 19th Apr 24
All Measures to Combat Global Warming Are Smoke and Mirrors! - 18th Apr 24
Cisco Then vs. Nvidia Now - 18th Apr 24
Is the Biden Administration Trying To Destroy the Dollar? - 18th Apr 24
S&P Stock Market Trend Forecast to Dec 2024 - 16th Apr 24
No Deposit Bonuses: Boost Your Finances - 16th Apr 24
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
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 Flat, Silver Jumps as Fed and Physical Demand Back in Focus

Commodities / Gold and Silver 2013 Oct 21, 2013 - 04:25 PM GMT

By: Adrian_Ash


The PRICE of gold was unmoved Monday morning in London, trading barely 25c higher at $1317.50 per ounce as European stock markets also halted their rise, holding global equities near 5-year highs.

Gold traded in Shanghai today pulled back to $7 per ounce above London benchmarks, with Australian bank ANZ saying trading looked "subdued" as a result.

Imports of silver bullion to China meantime fell 5.5% in September from August to 243 tonnes, new data showed.

That was 13.9% lower from September last year, says Reuters.

With the US debt ceiling resolved until January, says Jonathan Butler at Japanese trading conglomerate Mitsubishi, "Attention [in gold] should return to the strength of the US economy, Fed tapering (now less likely to start this year, in our view) and physical demand.

"On a technical level, last week's moves point to a mildly bullish outlook."

Calling last week's price action in gold "a bullish engulfing pattern," the latest chart analysis from Scotiabank says it offers "an encouraging sign that the bear channel of the past 2 months may be about to turn, though it is still early."

The US Dollar stemmed its response to last week's 3-month fix to the US debt ceiling, finding a floor against the Euro at $1.3675.

US jobs data in the Non-Farm Payrolls report – seen as key for the Federal Reserve's monetary policy – will now be released Tuesday after being delayed by the debt-ceiling shutdown in Washington.

Weekly data on gold and silver positioning in the US futures market remain delayed, meantime, as regulator the CFTC re-opened with other government departments.

Like gold, US debt prices also capped their rise early Monday, holding 10-year US Treasury bond yields at a 9-week low of 2.58%.

That compares to the two-year high of 3.00% reached in mid-September.

"[The debt ceiling deal] may not be clean and neat," Bloomberg today quotes Kit Juckes, global strategist at French investment bank Societe Generale, "but there's still perception out there that Treasuries are risk-free."

"The hard truth for China," says Li Jie, head of foreign reserves research at the Central University of Finance & Economics in Beijing, "is that there's no alternative to US Treasuries."

Despite trimming $95 billion off their total $4 trillion position in US debt since July, foreign central banks know that "whatever happens, undertaking a massive selloff of US bonds is not an option," says Li.

In contrast to gold on Monday, silver rose sharply, adding 1.7% to near 2-week highs at $22.29 per ounce.

Platinum meantime rose to 4-week highs, extending its spread above gold prices to a two-month high of $120 per ounce.

Palladium recorded its best AM London Fix since the end of August.

"We maintain our fairly pessimistic outlook for gold," says a note from US investment bank Morgan Stanley, "as we believe prices have fully factored in a turn in the US interest rate cycle.

"Gold's tepid response to the recent positive events confirms our view that tapering [of the Fed's quantitative easing] has been postponed, not cancelled, and is expected by year-end."

Saying that gold has "run out of steam", analysis from Baclays Capital in London adds that "More worrisome has been the lack of physical demand support amid the seasonally strong period for consumption in India, making the floor for prices fragile."

By Adrian Ash

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 - 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