Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Hits Post-Fed Low, But Supported by Central Bank Buying Supports

Commodities / Gold and Silver 2012 Jun 21, 2012 - 08:09 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleThe WHOLESALE MARKET gold price fell further Thursday in London, falling hard to 8-session lows at $1587 per ounce following last night's "no change" decision from the Federal Reserve on new US quantitative easing.

Major-government bond prices pushed higher, but the Euro currency retreated, down nearly 1¢ from its post-Fed high to trade back down at $1.2650.


Silver prices hit a new low for the month of June at $27.70 per ounce, while commodity indices dropped to 19-month lows and US crude fell to 7-month lows beneath $80 per barrel.

European stock markets also fell, with London's losses led by mining equities.

"Achieving a durable and prompt exit from the Euro area crisis, as well as avoiding the US 'fiscal cliff' [due start-2013] is crucial for sustained global recovery," said a new report from the International Monetary Fund on the outlook for the G20 group of large economies.

First estimates for China's manufacturing activity in June showed an eighth month of contraction on HSBC's purchasing manager' index – the longest such stretch since 2008.

Germany's PMI joined the rest of the Eurozone in showing a sharp contraction in both manufacturing and the services sector.

With the gold price slipping 2.5% for the week so far, "Hats off to the players in the gold market," says Edward Meir for INTL FC Stone, "who had the sense not to join in on the rallies [in commodities and equities] that were taking place" before the US central bank's Wednesday announcement.

"The high expectations in advance of the US Fed's meeting were priced out" of other asset classes, agrees Eugen Weinberg at Commerzbank in Frankfurt.

"[But] even without unconventional monetary policy," he adds in today's commodity note from the German bank, "central banks are currently shoring up the gold price...by diversifying their currency reserves and continuing to buy gold."

Russia's central bank bought another 14 tonnes of gold bullion in May, according to data from the Interfax agency Thursday.

That takes net purchases by the official sector to almost 150 tonnes for 2012 so far, based on data compiled by the World Gold Council market-development group.

"It is clear that BRICS countries have entered the stage when they can demand to be reckoned with," said Russia's deputy finance minister Sergei Storchak to reporters this morning, suggesting that Brazil, Russia, China, India and South Africa may launch a joint "anti-crisis" fund to challenge the IMF in Washington.

"It will be a parallel mechanism in addition to the IMF," said Storchak.

Between them, the so-called BRICS countries now hold over $4 trillion in central-bank reserves, including 2,650 tonnes of gold bullion – more than 8% of national gold reserves worldwide, and greater than all single hoards but the US and Germany's.

"Despite trading well through support in the low $1600s, gold managed to close with only a small loss on the day," says last night's report from bullion bank Scotia Mocatta.

"The bearish trendline off the March highs should provide resistance at $1632."

"Gold's dip below the $1600 level has confirmed our suspicion that the market was expecting something more [from the US Fed]," says today's analysis from Standard Bank in London, citing support for the gold price at $1585.

Any move in the gold price on news of a Spanish bank rescue "could be a knee-jerk move" Standard Bank adds, "given that markets have already discounted that Spain needs a bank bailout."

Madrid today enjoyed strong demand for €2.2 billion of medium-term debt sold at auction, but still had to pay investors record-high interest rates of 6.07% per year on 2017 bonds – up from 4.96% at last month's sale.

Set to announce his coalition cabinet in Athens on Thursday, new Greek prime minister Antonis Samaras will also ask Brussels to give Greece a further two years to meet its agreed government spending and debt targets, according to press reports.

Next week European Union president Herman Van Rompuy will present a "blueprint" for the Euro currency union to national leaders, according to un-named officials cited by Bloomberg.

The plan includes "jointly issued short-term bills, a debt- redemption fund and common banking supervision," says the newswire.

"There are no concrete plans that I know," German chancellor Angela Merkel said at a press conference in Berlin last night, "but there is the possibility of [the EU bail-out funds] buying government bonds on the secondary market.

"But that is a purely theoretical comment," she added – contracting Italian caretaker prime minister Mario Monti's earlier call for discussion on the issue.

"This is not a subject for debate right now."

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