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

ECB Surprise Interest Rate Cut & US Growth Whip Soporofic Gold Market

Commodities / Gold and Silver 2013 Nov 07, 2013 - 03:27 PM GMT

By: Adrian_Ash

Commodities

WHOLESALE GOLD turned suddenly volatile lunchtime Thursday in London after the European Central Bank surprised analysts by cutting its key interest rate to a new record low of 0.25%.

The Euro currency sank to an 8-week low vs. the Dollar, while European stock markets turned higher.


Leaping towards 6-week highs for Eurozone investors, gold initially dropped $5 per ounce, and then rallied $15, before returning to the $1317 per ounce level seen throughout what traders called "soporific, slow" dealing so far this week.

New US data then showed the world's largest economy growing 2.9% annualized during the July to October period, dramatically beating analysts' GDP forecasts of 2.0% growth.

Gold then fell to 3-week lows beneath $1300 per ounce.

Silver prices whipped 2.6% inside 40 minutes, also dropping substantially below the week's previous range.

Friday brings key US jobs data, widely seen as determining the Federal Reserve's view on future growth and therefore affecting its appetite for quantitative easing – currently left at $85 billion per month.

"The good news for gold bulls [was] that $1300 seems to be providing some type of psychological support," said Scotiabank's latest technical analysis of the gold charts late Wednesday.

"If you look at the gold market and the sentiment at the moment," said Mark Bristow, CEO of gold miner Randgold Resources to Reuters Insider TV today, "there's more downside risk than upside risk in the short term.

"But if you look at the longer term," said the CEO of South Africa's largest gold mining firm – now sinking shafts at the giant Kibali project in the Democratic Republic of Congo – "there's a healthy demand for gold."

The gap between Chinese gold supply (imports plus mining) and reported private demand "clearly implies" that China's central bank is buying gold, says Philip Klapwijk, formerly of Thomson Reuters GFMS and now CEO of new consultancy Precious Metals Insights in Hong Kong.

On Klapwijk's reckoning, the PBoC may have acquired some 300 tonnes of gold during the first half of 2013, helping "support" the metal during its sharpest drop in three decades.

Either way, "This year China will become the world's biggest source of demand for gold," says Nic Brown's commodity team at French investment and bullion bank Natixis. Because imports to historic world No.1 India "have collapsed as a result of strong government measures to reduce the trade deficit and combat a depreciating currency."

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