Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19
What UK CPI, RPI and REAL INFLATION Predict for General Election Result 2019 - 5th Dec 19
Supply Crunch Coming as Silver Miners Scale Back - 5th Dec 19
Gold Will Not Surpass Its 1980 Peak - 5th Dec 19
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19
The Narrative About Gold is Changing Again - 2nd Dec 19
Stock Market Liquidity & Volume Diminish – What Next? - 2nd Dec 19
A Complete Guide To Finding The Best CFD Broker - 2nd Dec 19
See You On The Dark Side Of The Moon - 2nd Dec 19
Will Lib Dems Win Sheffield Hallam From Labour? General Election 2019 - 2nd Dec 19
Stock Market Where Are We?  - 1st Dec 19
Will Labour's Insane Manifesto Spending Plans Bankrupt Britain? - 1st Dec 19
Labour vs Tory Manifesto Debt Fuelled Voter Bribes Impact on UK General Election - 30th Nov 19
Growing Inequality Unrest Threatens Mining Industry - 30th Nov 19
Conspiracy Theories Are Killing This Nation - 30th Nov 19
How to Clip a Budgies / Parakeets Wings, Cut / Trim Bird's Flight Feathers - 30th Nov 19
Hidden Failure of SIFI Banks - 29th Nov 19
Use the “Ferrari Pattern” to Predictably Make 431% with IPOs - 29th Nov 19
Tax-Loss Selling Drives Down Gold and Silver Junior Stock Prices - 29th Nov 19
We Are on the Brink of the Second Great Depression - 29th Nov 19
How to Spot REAL Amazon Black Friday Bargains and Avoid FAKE Sales - 29th Nov 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

Risk of New Debt Crisis After Syriza Victory In Greece

Commodities / Gold and Silver 2015 Jan 26, 2015 - 03:33 PM GMT

By: GoldCore

Commodities

The crushing victory of the Greek opposition party Syriza in yesterday’s Greek elections has added to jitters in already jittery financial and foreign exchange markets.

The euro tumbled and gold in euros surged to its highest level since April 2013, at €1,167.94/oz as markets opened in Asia. The euro has since stablised but remains near a 11 year low against the dollar and is now down 16.7 per cent against gold in January alone.


Gold in Euros – 5 Days (Thomson Reuters)

U.S. stock index futures fell, as did European shares prior to slight recoveries while borrowing costs for the euro zone’s most indebted states rose due to increasing concerns that the Syriza party looked set to take on Greece’s international lenders after the landslide victory.

Greek markets saw worse losses. Ten-year yields rose 22 basis points to 8.99 percent, while Greece’s main stock index fell 0.6 percent, with shares in banks such as Alpha Bank and Piraeus Bank hit even more.

Yields on lower-rated euro zone bonds bounced off record lows, with Italian 10-year yields up 2 basis point at 1.54 percent and Spanish and Portuguese yields 2 bps higher at 1.39 percent and 2.26 percent, respectively.

Gold in Euros – 5 Years (Thomson Reuters)

A period of uncertainty and heightened market nervousness now seems likely and this should benefit gold.

Political uncertainty has already generated bank runs. Greek banks are already facing a serious liquidity problem as depositors have withdrawn billions of euros in recent days and weeks.  Four major Greek banks have already asked for Emergency Liquidity Assistance (ELA) from the European Central Bank (ECB).

Syriza leader Alexis Tsipras promised Greeks overnight that the five years of austerity imposed under bailout programs worth 240 billion euros from the European Union (EU) and the International Monetary Fund (IMF) were over.

Prime Minister-elect Alexis Tsipras, who pledged to renegotiate the nation’s international bailout, won 149 out of a possible 300 seats in Parliament. His mandate is now to confront the nation’s programme of austerity, imposed in return for pledges of 240 billion euros in aid since May 2010.

Syriza have been given the resounding backing of the Greek people to initiate reforms to the agreement the previous government negotiated with the Troika. His pledges include a writedown of Greek debt while persuading European creditors to keep aid flowing.

The left-wing group are just two seats short of a majority with means they should be able to form a government with sympathetic individuals or parties.

While Syriza have been careful to highlight their commitment to the EU and the Euro, there is no mistaking the hardline tone of Alexis Tsipras when it comes to dealing with the Troika of the IMF, the ECB and the European Commission (EC).

In Athens yesterday, Tsipras told the crowds “Your decision today has made the Troika a thing of the past,” according to London’s Telegraph.

“Our victory is a victory for all people in Europe who are fighting austerity. The new Greek government will be willing to collaborate and negotiate with our European counterparts for a fair solution so that Greece can emerge from the vicious circle of debt.”

Syriza appear to have every intention of keeping their election promises to cut taxes, raise public spending and increase the minimum wage. They maintain that this can be done while staying within budget by drastically cutting payments to their creditors.

Syriza’s likely finance minister to be, Yanus Varoufakis, told Channel 4, ” We are going to destroy the Greek oligarchy system.”

Exactly who Syriza define as being part of the oligarchy system is unclear as of now but it is likely that many banks and financial institutions – the beneficiaries of the current reform program – will be in Syriza’s sights.

The EU will be loathe to give any concessions that may weaken Europe’s already desperately fragile banking system. Brussels will be unwilling to sustain any such concessions lest other countries, like Ireland, demand a restructuring or write-down of their debts.

Irish Taoiseach, Enda Kenny, offered tacit support for renegotiation of the so called Greek bailout when in Davos, while also expressing hope that Greece remain within euro zone.

If Syriza is blocked from improving the conditions of Greece’s working and middle classes, it may have no alternative but to leave the Euro – a very messy and chaotic process which would lead to the end of the single currency as we know it. It would also make more likely a return to drachmas, pesetas, liras and punts.

Skillful accommodations will need to be negotiated on both sides if Greece is to remain in the Euro and the banking system is to remain intact.

Tsipras’ lack of experience and Brussels’ lack of humility may not be conducive to such accommodations.

With the ECB’s admission that the Eurozone is already in a very fragile state, it seems great uncertainty lies ahead for the international monetary system.

Gold remains an essential hedge for investors at this time and an insurance policy for depositors in the euro zone and internationally – exposed to the dual risk of bail-ins and euro devaluation.

The Comprehensive Guide to Bail-ins: Protecting Your Savings in the Coming Bail-in Era

MARKET UPDATE

Today’s AM fix was USD 1,282.75, EUR 1,141.54 and GBP 854.60 per ounce.
Friday’s AM fix was USD 1,293.50, EUR 1,150.29 and GBP 863.49 per ounce

Gold and silver both performed well last week and rose 1.43% and 3.45% respectively. Gold edged down $10.0 or 0.77% to $1,293.70 per ounce Friday and silver fell $0.08 or 0.44% to $18.30 per ounce.

Gold in U.S. Dollars – 5 Years (Thomson Reuters)

Today, gold has pulled back 1 percent as traders cashed in gains after the five month highs attained last week. The ripple felt in other markets on the Syriza’s party victory in the Greek elections may have squeezed some nervous traders into cashing in their positions.

Spot gold was down 1 percent at $1,280.10 an ounce by in early London trading. Comex U.S. gold futures for February delivery were down $8.70 at $1,283.90.

Silver was down 1.7 percent at $17.99  an ounce in London, while platinum was down 0.7 percent at $1,251.25 an ounce and palladium was down 0.8 percent at $770 an ounce.

Investor sentiment has improved somewhat recently due to safe haven demand for bullion. Bullion buyers are continuing to accumulate today viewing weakness as an opportunity.

Bullish bets on gold futures and options increased for a fourth week in the week ending January 20, while holdings of gold-backed ETFs have also increased.

A new Asian gold contract by CME Group began trading in Hong Kong on today. The 1 kilogramme (kg) physically settled contract was trading at a premium of $2-$3 an ounce over the global benchmark.

The CME contract follows new contracts trading in China and Singapore. While, liquidity has been an issue, the moves again show how the gold market is moving East and Asia becoming increasingly important to both the setting of the price and to the physical bullion market in terms of supply, demand and storage.

This update can be found on the GoldCore blog here.

Yours sincerely,
Mark O'Byrne
Exective Director

IRL
63
FITZWILLIAM SQUARE
DUBLIN 2

E info@goldcore.com

UK
NO. 1 CORNHILL
LONDON 2
EC3V 3ND

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

W www.goldcore.com

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore 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

6 Critical Money Making Rules