Best of the Week
Most Popular
1. Climate Change Mass Extinction - Birds, Bees and Bugs: Going Going Gone - Richard_Mills
2.A Purrrfect Gold Price Setup! - Peter_Degraaf
3.Who Finances America's Borrowing? Recession Indicator for Independent Thinkers Part 2 - F_F_Wiley
4.America’s One-sided Domestic Financial War - Raymond_Matison
5.Gold Price Summer Doldrums - Zeal_LLC
6.Two Key Events Will Unleash Gold - Jim_Willie_CB
7.Billionaire Schools Teacher in NAFTA Trade Talks - Richard_Mills
8.Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - Jeb_Handwerger
9.Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - Troy_Bombardia
10.G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - Chris_Vermeulen
Last 7 days
How Crazy It Is to Short Gold with RSI Close to 30 - 16th Jul 18
Markets Pay Attention Moment - China’s Bubble Economy Ripe for Bursting - 16th Jul 18
Stock Market Uptrend Continues, But... - 16th Jul 18
Emerging Markets Could Be Starting A Relief Rally - 16th Jul 18
(Only) a Near-term Stock Market Top? - 16th Jul 18
Trump Fee-Fi-Foe-Fum Declares European Union America's Enemy! - 16th Jul 18
US Stocks Set For Further Advances As Q2 Earnings Start - 15th Jul 18
Stock Market vs. Gold, Long-term Treasury Yields, 10yr-2yr Yield Curve 3 Amigo's Update - 15th Jul 18
China vs the US - The Road to War - 14th Jul 18
Uncle Sam’s Debt-Money System Is Immoral, Tantamount to Theft - 14th Jul 18
Staying in a Caravan - UK Summer Holidays 2018 - Cayton Bay Hoseasons Holiday Park - 14th Jul 18
Gold Stocks Summer Lows - 14th Jul 18
Trump US Trade War With China, Europe Consequences, Implications and Forecasts - 13th Jul 18
Gold Standard Requirements & Currency Crisis - 13th Jul 18
Focus on the Greenback, Will USD Fall Below Euro 1.6? - 13th Jul 18
Stock Market Outlook 2018 - Bullish or Bearish - 13th Jul 18
Rising Inflation is Not Bearish for Stocks - 13th Jul 18
Bitcoin Picture Less Than Pretty - 13th Jul 18
How International Observers Undervalue the Chinese Bond Market - 13th Jul 18
Stocks Trying to Break Higher Again, Will They? - 12th Jul 18
The Rise and Fall of Global Trade – Redux - 12th Jul 18
Corporate Earnings Q2 2018 Will Probably be Strong. What This Means for Stocks - 12th Jul 18
Is the Relative Strength in Gold Miners to Gold Price Significant? - 12th Jul 18
Live Cattle Commodity Trading Analysis - 12th Jul 18
Gold’s & Silver’s Reversals’ Reversal - 12th Jul 18
The Value of Bitcoin - 11th Jul 18
America a Nation Built on Lies - 11th Jul 18
China, Asia and Emerging Markets Could Result In Chaos - 11th Jul 18
Bullish Gold Markets in the Big Picture? - 11th Jul 18
A Public Bank for Los Angeles? City Council Puts It to the Voters - 11th Jul 18
Yield Curve Inversion a Remarkably Accurate Warning Indicator For Economic & Market Peril - 11th Jul 18
Argentina Should Scrap the Peso and Dollarize - 11th Jul 18
Can the Stock Market Close Higher For a Record 10th Year in a Row? - 11th Jul 18
Why Life Insurance Is A Must In Financial Planning - 9th Jul 18
Crude Oil Possibly Setting Up For A Big Downside Move - 9th Jul 18
BREAKING: New Tech Just Unlocked A Trillion Barrels Of Oil - 9th Jul 18
How Trade Wars Penalize Asian Currencies - 9th Jul 18
Another Stock Market Drop Next Week? - 9th Jul 18
Are the Stock Market Bulls Starting to Run? - 9th Jul 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

Gold Rises To 13 Month High as ECB ‘Bazooka’ Shoots Blanks

Commodities / Gold and Silver 2016 Mar 11, 2016 - 02:18 PM GMT

By: GoldCore

Commodities

Gold prices climbed to a 13-month high in dollar terms overnight ($1,282.51) after the increasingly adventurous, dare one say reckless, European Central Bank unleashed its latest ‘bazooka’ and initiated more interest-rate cuts, a significant extension in currency printing and bond purchases and also a potential subsidy to banks lending.


Gold in EUR – 1 Year

Draghi cut the ECB’s deposit rate by a further 10 basis points to minus 0.40 percent, and its main refinancing rate to zero and announced that the ECB may buy nearly a whopping €1 trillion in corporate debt.

The move was even more dovish than expected and confirmed, if any confirmation was necessary , that the ultra loose monetary policy adventure has intensified and will actually deepen in the short term.

Gold reached 3 year highs in euro terms at €1,161.40 per ounce on Monday after 4% gains last week – likely anticipating ‘Super Mario’ Draghi’s latest attempt at pulling a rabbit out of the hat. There is likely an element of ‘buy the rumour and sell the news’ as year to date euro gold has already eked out strong gains of 17%.

On the announcement yesterday, the euro fell initially versus gold from €1,135 per ounce to €1,155 per ounce prior to reversing and falling back to €1,135 per ounce as the euro strengthened. Gold in euro terms was actually marginally lower by the close yesterday and is marginally lower this week after the multi-month record high on Monday.

Huge volatility was seen in all markets as Draghi surprised even the monetary doves by making already ultra loose monetary policies even looser. This was most evident in the foreign exchange markets where despite deepening currency debasement the euro surged in value. Versus the dollar, the euro surged from 1.082 to over 1.11 in minutes or a near 3% surge. By the end of the day, the euro had surged from 1.082 to over 1.121 or a move of over 3.6% in a few hours.

Such volatility is more akin to a casino rather than a stable foreign exchange market between two leading international mediums of exchange. It is great for and welcomed by CFD providers, spread betters, brokers, hedge funds and speculative banks. But it has real world economic consequences for small and medium enterprises and all EU companies and international companies trading in the EU. Such volatility and extremely rapid moves in the value of the two world’s leading trading currencies is a sign that something is very wrong with the monetary system.

It will likely badly impact many employment generating companies in the import and export sectors and is not good for the trading of goods and services internationally and for world trade. Trade and commerce, the backbone of the economy is being put at risk in order to protect the interests of banks and a dysfunctional banking, financial and monetary system. This is a simplification, but it is largely the truth.

The strength of the euro yesterday was counter intuitive and given the scale of manipulation in markets today may have been due to intervention. A collapse in the value of the euro during and immediately after Draghi’s speech would not be welcomed by monetary moderates – labelled hawks – in the Bundesbank, in Germany and elsewhere in Europe and indeed by savers and depositors throughout the monetary dis-union.

Stocks moved higher briefly prior to giving up gains as did bonds. This is likely due to Mario Draghi saying thathe didn’t anticipate further rate cuts. Stock and bond markets are now hopelessly addicted to the cocaine of cheap money and currency debasement. Something that will not end well and bodes ill for these markets.

The ECB’s drastic action reeks of panic and was not the panacea that “cheap money” addicted banks and markets had hoped for.

“Insanity is doing the same thing over and over again and expecting a different result.” So said Albert Einstein and the ECB is in danger of not realising that its QE programme and ultra loose monetary policies are failing. You cannot print your way to prosperity and it may be slowly dawning on market participants that you cannot print your way out of deflation.

Markets remain subject to a weird combination of irrational complacency and significant denial. But beneath this comes a deepening concern amongst the smart money that the imbalances that brought the global financial system to its knees in the first financial crisis remain and are in many cases worse today.

There is a distinct whiff of 2008 in the air. However today, the belief in central banks as monetary saviours of the universe is increasingly in doubt. Indeed, there are real and growing concerns that they are contributing to the creation of much bigger financial bubbles with similar if not worse consequences.

The financial insurance that is physical gold has never been more important to own.

LBMA Gold Prices
11 Mar: USD 1,262.25, EUR 1,136.50 and GBP 883.03 per ounce
10 Mar: USD 1,247.25, EUR 1,137.04 and GBP 876.67 per ounce
09 Mar: USD 1,258.25, EUR 1,146.69  and GBP 884.16 per ounce
08 Mar: USD 1,274.10, EUR 1,155.69 and GBP 894.35 per ounce
07 Mar: USD 1,267.60, EUR 1,156.96 and GBP 896.13 per ounce

This update can be found on the GoldCore blog here.

Mark O'Byrne

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 http://www.goldcore.com/uk/

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

© 2005-2018 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