Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Investing in the Tulip Crypto Mania 2021 - 19th Jun 21
Here’s Why Historic US Housing Market Boom Can Continue - 19th Jun 21
Cryptos: What the "Bizarre" World of Non-Fungible Tokens May Be Signaling - 19th Jun 21
Hyperinflationary Expectations: Reflections on Cryptocurrency and the Markets - 19th Jun 21
Gold Prices Investors beat Central Banks and Jewelry, as having the most Impact - 18th Jun 21
Has the Dust Settled After Fed Day? Not Just Yet - 18th Jun 21
Gold Asks: Will the Economic Boom Continue? - 18th Jun 21
STABLE COINS PONZI Crypto SCAM WARNING! Iron Titan CRASH to ZERO! Exit USDT While You Can! - 18th Jun 21
FOMC Surprise Takeaways - 18th Jun 21
Youtube Upload Stuck at 0% QUICK FIXES Solutions Tutorial - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations Video - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations and Trend Analysis into Market Correction - 17th Jun 21
Stocks, Gold, Silver Markets Inflation Tipping Point - 17th Jun 21
Letting Yourself Relax with Activities That You Might Not Have Considered - 17th Jun 21
The Federal Reserve and Inflation - 16th Jun 21
Inflation Soars 5%! Will Gold Skyrocket? - 16th Jun 21
Stock Market Sentiment Speaks: Inflation Is For Fools - 16th Jun 21
Four News Events That Could Drive Gold Bullion Demand - 16th Jun 21
5 ways that crypto is changing the face of online casinos - 16th Jun 21
Transitory Inflation Debate - 15th Jun 21
USDX: The Cleanest Shirt Among the Dirty Laundry - 15th Jun 21
Inflation and Stock Market SPX Record Highs. PPI, FOMC Meeting in Focus - 15th Jun 21
Stock Market SPX 4310 Right Around the Corner! - 15th Jun 21
AI Stocks Strength vs Weakness - Why Selling Google or Facebook is a Big Mistake! - 14th Jun 21
The Bitcoin Crime Wave Hits - 14th Jun 21
Gold Time for Consolidation and Lower Volatility - 14th Jun 21
More Banks & Investors Are NOT Believing Fed Propaganda - 14th Jun 21
Market Inflation Bets – Squaring or Not - 14th Jun 21
Is Gold Really an Inflation Hedge? - 14th Jun 21
The FED Holds the Market. How Long Will It Last? - 14th Jun 21
Coinbase vs Binance for Bitcoin, Ethereum Crypto Trading & Investing During Bear Market 2021 - 11th Jun 21
Gold Price $4000 – Insurance, A Hedge, An Investment - 11th Jun 21
What Drives Gold Prices? (Don't Say "the Fed!") - 11th Jun 21
Why You Need to Buy and Hold Gold Now - 11th Jun 21
Big Pharma Is Back! Biotech Skyrockets On Biogen’s New Alzheimer Drug Approval - 11th Jun 21
Top 5 AI Tech Stocks Trend Analysis, Buying Levels, Ratings and Valuations - 10th Jun 21
Gold’s Inflation Utility - 10th Jun 21
The Fuel Of The Future That’s 9 Times More Efficient Than Lithium - 10th Jun 21
Challenges facing the law industry in 2021 - 10th Jun 21
SELL USDT Tether Before Ponzi Scheme Implodes Triggering 90% Bitcoin CRASH in Cryptos Lehman Bros - 9th Jun 21
Stock Market Sentiment Speaks: Prepare For Volatility - 9th Jun 21
Gold Mining Stocks: Which Door Will Investors Choose? - 9th Jun 21
Fed ‘Taper’ Talk Is Back: Will a Tantrum Follow? - 9th Jun 21
Scientists Discover New Renewable Fuel 3 Times More Powerful Than Gasoline - 9th Jun 21
How do I Choose an Online Trading Broker? - 9th Jun 21
Fed’s Tools are Broken - 8th Jun 21
Stock Market Approaching an Intermediate peak! - 8th Jun 21
Could This Household Chemical Become The Superfuel Of The Future? - 8th Jun 21
The Return of Inflation. Can Gold Withstand the Dark Side? - 7th Jun 21
Why "Trouble is Brewing" for the U.S. Housing Market - 7th Jun 21
Stock Market Volatility Crash Course (VIX vs VVIX) – Learn How to Profit From Volatility - 7th Jun 21
Computer Vision Is Like Investing in the Internet in the ‘90s - 7th Jun 21
MAPLINS - Sheffield Down Memory Lane, Before the Shop Closed its Doors for the Last Time - 7th Jun 21
Wire Brush vs Block Paving Driveway Weeds - How Much Work, Nest Way to Kill Weeds? - 7th Jun 21
When Markets Get Scared and Reverse - 7th Jun 21
Is A New Superfuel About To Take Over Energy Markets? - 7th Jun 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Outlook Positive following Euro Stagnation, Paulson Hedge Fund's Position

Commodities / Gold and Silver 2011 Aug 16, 2011 - 08:14 AM GMT

By: Ben_Traynor


Best Financial Markets Analysis ArticleSPOT MARKET gold bullion prices hovered around $1780 an ounce Tuesday morning London time – up 2.9% on yesterday's low – as stocks and commodities fell and US Treasury bonds rose after news of economic slowdown in the heart of the Euro area.

"Disappointing Eurozone GDP figures...have further dampened sentiment, encouraging investors to seek the relative safety of precious metals," says Marc Ground, commodities strategist at Standard Bank.

Earlier on Tuesday, gold bullion was "supported by Chinese buying...but flows have been limited" according to one Hong Kong bullion dealer.

Silver bullion prices meantime fell to a low of $39.32 per ounce – 0.6% below where they closed on Friday – before rallying around lunchtime in London, heart of the world's professional bullion market.

The volume of gold bullion traded in London's wholesale market rose 4% in July compared to the previous month, new data from the London Bullion Market Association said today.

By contrast, the average number of silver bullion ounces transferred went down – falling 7.5% month-on-month – but from July 2010, silver trading leapt 180% by volume and by 490% by value.

Gold bullion transfers in London rose 11.6% year-on-year by volume, up by 47.2% by value.

"Gold looks vulnerable...short-term,"  warns Standard Bank's Ground, noting "the strong drop-off in speculative longs" held by traders in US gold futures last week. 

The 9% cut in noncommercial – so-called speculative – trading positions on the Comex exchange "points to a market running out of momentum," says Ground. 

But "the short-term outlook for gold remains positive," counters VTB Capital analyst Andrey Kryuchenkov, because "There are still far too many macro uncertainties."

"Everything is pointing toward stagnation in the Euro area in the second quarter," said Juergen Michels, London-based chief Euro area economist at Citigroup, on Tuesday morning, as French President Nicolas Sarkozy and German chancellor Angela Merkel were due to meet in Paris for further discussions of the ongoing European debt crisis.

The issue of 'Eurobonds' – joint-government bonds collectively backed by all Eurozone nations – is expected to be on the agenda despite German denials.

"We don't plan on mentioning Eurobonds," Merkel spokesman Steffen Seibert told reporters on Monday.

"It's simply not a sensible idea."

But "the alternative [to Eurobonds]," counters Anton Boerner, head of Germany's BGA export association, "is the markets attack Italy, then France, we lose our AAA-rating and then it's our turn."

"We'll end up paying three times over. This way we pay just once."

Germany's economic growth slowed to 2.7% year-on-year in the second quarter of the year – down from a 4.9% annual growth rate in Q1 – according to data published Tuesday.

Eurozone-wide growth meantime slowed to 1.7% per year in Q2 – down from 2.5% the previous quarter.

Here in the UK, consumer price inflation rose to 4.4% in July, up from 4.2% the previous month. The Bank of England – which has held its benchmark interest rate at 0.5% for over two years – has an official CPI inflation target of 2%.

Retail price inflation, and alternative measure of the cost of living, remained at 5%.

Over in New York, hedge fund boss John Paulson meantime held onto his substantial gold bullion position during the second quarter of the year, documents filed with US regulator the Securities and Exchange Commission show.

"Paulson...believes that gold is earmarked to move substantially higher," reckons Mark Luschini, chief investment strategist at Janney Montgomery Scott, which manages $54 billion in assets, citing "Dollar-debasing" US monetary policy as a potential driver of higher Gold prices.

Paulson holds a $4.6 billion of shares in SPDR Gold Trust (ticker: GLD) – the world's largest gold ETF – news agency Reuters reports.

Fellow hedge fund manager George Soros, by contrast, cut his holdings in the GLD by 13% in Q2, according to the newswire. This leaves Soros holding around $6 million of GLD shares – down from around $800 million at the start of the year.

By Ben Traynor

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

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(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 - 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