Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
Gold Price During Hyperinflation - 12th May 21
Stock Market Extending Phase Two? - 12th May 21
Crypto 101 for new traders – ETH or BTC? - 12th May 21
Stock Market Enters Early Summer Correction Trend Forecast Time Window - 11th May 21
GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
Cathy Wood Bubble Bursts as ARK Funds CRASH! Enter into a Severe Bear Market - 11th May 21
Apply This Technique to Stop Rushing into Trades - 10th May 21
Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
CHIA Getting Started SSD Crypto Mining by Plotting and Farming on Your Hard Drives Guide - 9th May 21
Yaheetech Mesh Best Cheap Computer /. Gaming Chairs on Amazon Review - 9th May 21
Breaking US Trade Embargo with Cuba - Build 7 Computers in 14 Hours Before Ship Sales Challenge - 9th May 21
Dripcoin Applies New Technology That Provides Faster Order Execution - 9th May 21
Capital Gains Tax Hike News: Was It REALLY to Blame for Sell-off? - 7th May 21
Stock Market Transportation Index Continues To Grind Higher - 7th May 21
SPX Stock Market Correction Arriving or Not? - 7th May 21
How to Invest in an Online Casino? - 7th May 21
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Euro-Gold Drops 1% in 30 Mins as Trichet Vows Strong Inflation Vigilance

Commodities / Gold and Silver 2011 Mar 03, 2011 - 11:26 AM GMT

By: Adrian_Ash

Commodities

BOTH GOLD and spot silver prices fell sharply in London trade lunchtime Thursday, finding a floor some 1.5% and 2.3% below this week's record highs vs. the Dollar after European Central Bank president Jean-Claude Trichet said a Eurozone rate rise is "possible" next month.

The gold price in Euros dropped 0.9% in just 30 minutes to trade 2.5% below this week's 7-week high of €33,500 per kilo.


US crude oil also fell, extending the 1.1% drop to $101 per barrel seen overnight after Venezuelan president Chavez offered to broker an international agreement to resolve Libya's escalating civil war.

Speaking in Frankfurt today, ECB chief Trichet vowed "strong vigilance" on inflationary pressures for the first time since slashing interest rates to a record low amid the global financial crisis, and re-stated his "primary mandate to deliver price stability to 331 million citizens" of the 17-nation currency union.

"It is certainly not the right interpretation that this would be the start of a series rate rises," he added at the ECB's monthly press conference, made after the central bank voted to keep rates on hold at 1.0% for the 22nd month in a row.

The gold price in Sterling also fell, but lost only 1.1% as the Pound fell hard on further weakness in the UK's PMI index of  service-sector activity.

"Cable looks in need of support to me," says one London trader in a note, claiming to spot a sovereign-government player in the Pound/Dollar market.

"We still expect the Bank of England will not announce a hike of 25 basis points until late 2011," says the forex desk at Jyske Bank, forecasting "very much" disappointment for Sterling bulls and a 2011 low of $1.47 – a 10% drop from yesterday's new 14-month highs.

"[It] might appear...that Bank Rate needs to rise faster than implied by the market yield curve," said Bank of England policy-voter Charles Bean in a speech on Thursday.

"But the risk of inflation staying above the target into the medium term needs to be weighed against the downside risk to growth...Temporary deviations of inflation from the target are permissible..."

UK inflation has now out-run the Bank of England's official upper tolerance of 3.0% per year for 13 months running on the Consumer Price Index.

Like gold, meantime, silver bullion also repeated and extended Wednesday night's sharp drop, slipping 2.3% against the Dollar from Wednesday's new 31-year high above $35 per ounce.

"Further up are the 36.00/50 Point & Figure targets, the 61.8% Fibonacci extension of the 2010-11 rise, taken from the January low...and the next higher Point & Figure target at 38.50," says the latest technical chart analysis from Axel Rudolph  at Commerzbank.

Silver's "all-time high at 49.45...remains on the radar longer term. Last week’s low at 31.71 should now offer support, if retested at all that is."

Silver's industrial use is also supporting prices, according to a research note London market-maker Deutsche Bank's analysts.

"Global growth is anticipated to remain a priority for [governments and central banks] over the course of the next several years, given the obvious negative consequences that slow growth would have," they write, repeating their call for the silver price to average $50 per ounce in 2012.

"Key applications such as solar and electrical/electronics have impressive global growth profiles."

Deutsche's analysts see the gold price trading at $2000 next year.

Egypt's "Supreme Council of the Armed Forces" meantime announced on its Facebook page that it "decided to accept the resignation" of prime minister Ahmed Shafiq – appointed in the dying days of Mubarak regime, which came to power in a military coup in 1981 – and "appointed [former transport minister] Essam Sharaf to form the new government."

"Intensive negotiations" meantime continued in Libya – where Gaddafi loyalists took and then lost control of the Bregra oil terminal town on Weds – to free 3 Dutch marines captured while while trying to evacuate European consulate staff on Sunday.

Up to 90,000 people have now fled to Tunisia, the United Nations said, with many thousands more waiting to cross.

By Adrian Ash
BullionVault.com

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

Formerly City correspondent for The Daily Reckoning in London and a regular contributor to MoneyWeek magazine, Adrian Ash is the editor of Gold News and head of research at www.BullionVault.com , giving you direct access to investment gold, vaulted in Zurich , on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2011

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.


© 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