Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

"Under-Valued" Gold Stalls Again as New Chinese Stimulus Rumored

Commodities / Gold and Silver 2012 May 29, 2012 - 06:30 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticlePROFESSIONAL WHOLESALE prices in the gold investment market reversed an early lift for the second day running in London Tuesday morning, easing back to last week's finish at $1573 per ounce as the Euro currency also reversed its early rise to $1.26.

European stock markets cut their gains but held 0.7% better by lunchtime, while commodity prices were broadly higher but the silver price fell to new 3-session lows beneath $28.30 per ounce.


US, UK, German and French government bonds rose yet again, pushing the annual yield on 10-year Bunds down to 1.35%.

The official statistics agency today pegged Germany's consumer price inflation at 1.9% year-on-year by, down from 2.1% in April.

Spanish retail sales fell last month by almost 10% from April 2011 according to new data. Spain's cost of living, however, rose 2.1% on the official CPI measure.

"We still believe that gold has become increasingly undervalued," says a note from South Africa's Standard Bank, pointing again to $1640 per ounce as "fair value" in the gold investment market.

"Gold looks the healthiest metal currently," says David Jollie at Japanese trading conglomerate Mitsui, "but new drivers may be needed to encourage the price back above $1,600 and reinvigorate the rest of the precious metals."

With Indian consumer demand still poor thanks to the weak Rupee, "We have seen other Asian physical buyers such as China pick up some of the slack, as well as central banks," says Swiss refiner MKS's trading desk in Sydney, Australia.

Shanghai shares rose 1.2% on Tuesday amid rumors of a new consumer stimulus package from Beijing.

An official told Reuters on Monday that rural workers and owners of small-engine cars will receive unspecified subsidies to encourage them to trade in their old vehicles for new.

Credit Suisse analysts forecast a stimulus package ranging from CNY1-2 trillion (up to $315bn) – around half the size of China's 2008 program.

UK chancellor George Osborne will meantime not tax pies and other baked goods, the Treasury said overnight, losing £75 million per year ($110m) in extra revenue from the so-called "pasty tax" and other levies now reversed.

"[It] is true that a change [of policy] would weaken the government’s credibility," writes Financial Times columnist Martin Wolf. "But this is because the government made an unwise commitment [to austerity].

"Cameron/Osborne are sharply tightening fiscal policy in the face of a depressed economy," says New York Times columnist Paul Krugman – who is lecturing at the London School of Economics on Tuesday, and whose new book End This Depression Now! is apparently in its fourth printing in Spain.

"Britain is choosing to emulate both the United States and the troubled nations of Europe when it doesn't have to – all in the name of an economic theory that was foolish two years ago, and completely discredited now."

Irish Taoiseach Enda Kenny today warned that Dublin's credit rating – already cut to "junk" status by Moody's despite the €85 billion rescue in 2010 by the IMF, European Central Bank and European partner states – would be downgraded further if voters don't back the new European fiscal treaty in Thursday's referendum.

Peaking above 14% per year last summer, Ireland's 10-year government bond yields today ticked above 6.0% in early trade.

Back in the gold investment market, "Support at 1532/22 has held once more and continues to underpin" the Dollar price, says the latest weekly chart analysis from Commerzbank in Luxembourg.

However, "We believe that this significant area will be retested in the months to come and that it will give way when this occurs."

Spanish government bonds fell further Tuesday morning, pushing 10-year costs for Madrid above 6.5% after a spokesman was quoted saying that choosing between cash or newly-issued government debt to fund the latest €19 billion rescue of the Bankia lender was now only a "marginal" issue.

"The phrase 'house of cards' comes to mind," says Georg Grodzki at London's £391 billion Legal & General insurance and investment group.

"We do not believe that Bankia is unique [in Spain] in the extent of new losses identified," the Financial Times quotes analysts at Rabobank, noting Friday's restatement of 2011's profits from a €309m profit into a €2.97bn loss.

Madrid is also "considering" allowing Spain's regional governments – now some €140bn in debt – to issue joint bonds, guaranteeing them by setting aside tax revenues so that creditors are paid first, according to Bloomberg.

"It would provide some comfort to investors at a time when a guarantee from the Spanish sovereign is not exactly gold plated," says Credit Agricole strategist Harpreet Parhar in London.

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 2012

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

6 Critical Money Making Rules