Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Pullback to US$1700 "Would See Significant Support"

Commodities / Gold and Silver 2012 Oct 17, 2012 - 08:27 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleWHOLESALE BULLION prices to buy gold recovered an early dip in London on Wednesday morning, rising back to $1750 per ounce as European stock markets also rose and the single currency hit its best level in more than a month.

The rising Euro knocked the price for French, German and Italian investors to buy gold back to a 6-week low of €1333 per ounce (€42,860 per kilo).


That's some 4% below Euro-gold's new all-time high of 1st Oct.

"I have been speaking to a number of Gold Dealers this week," says Swiss refinery and finance group MKS's senior trader in Sydney Alex Thorndike, "and the majority still feel their will be significant support on any extended pullback towards $1675-1700.

"Most, myself included, think long-term macro investment buying and possibly even central bank demand would be seen at these levels, as well as a resurgence in physical interest from India – especially if the Rupee remains strong."

Commodities were broadly flat meantime on Wednesday, but so-called "safe haven" government bond prices ticked lower as Spanish debt rose on expectations of a formal bail-out request.

The Moodys rating agency last night confirmed Spain's ranking above "junk" status.

Madrid's 10-year bond yields today eased to their lowest spread above comparable German debt in 6 months.

"Gold and the precious complex have been held afloat overnight and this morning by a stronger Euro," says UBS strategist Edel Tully in a note.

"Gold's ability to stay buoyed today will be dependent on foreign exchange moves and risk appetite."

Silver prices today extended to 1.8% their rally from Monday's 6-week low for Dollar investors, recovering the $33 mark as the London Silver Fix approached at midday.

The first drop in solar-panel silver demand for 12 years will likely dent 2013's average silver price by more than 4%, according to New York-based consultancy the CPM Group.

"China's near-term appetite for gold appears to be waning as bullion imports from Hong Kong slow," write analysts at London market-maker HSBC in a note.

Shipments of gold bullion to China from Hong Kong – the major route for imports to buy gold – slipped nearly 30% in August from July, according to latest data from the Census & Statistics Department.

"What we are hearing from our customers is that they were buying gold rapidly over the last couple of years," MarketWatch quotes Scotia Mocatta's managing director in Hong Kong, Sunil Kashyap, today. "But they would now see some of their stocks sold off before they rebuild their inventories."

In base metals, "China destocking [in iron] has run its course," says Bloomberg this morning, quoting mining giant BHP Billiton's CEO Marius Kloppers, who believes that stocks of iron ore have now been depleted to provide a "base level" of demand.

But with China responsible for 40% of global money-supply growth since 2007, "and money-supply growth in the developed world still flat on its back, a slowdown in China augurs for lower inflation – perhaps deflation – and higher real rates," says strategist Russell Napier at CLSA, Asia's largest independent brokerage.

Higher returns to cash and bonds, after allowing for inflation, would likely dent prices to buy gold, Napier tells MarketWatch.

"Nominal rates [are already] close to zero," he says. So sub-zero inflation would be "bad for gold."

Over on the supply side Wednesday, South African miner Gold Fields said its ultimatum to striking workers at the Beatrix project – threatening summary dismissal – today saw 6,200 illegal strikers return to work.

With up to 50% of South Africa's gold output now closed by wildcat action, Harmony Gold said overnight it may still implement a failed wage offer made jointly with Gold Fields and AngloGold – the world's fifth and fourth largest gold mining companies respectively.

World No.2 gold producer Newmont today reported a 6% drop in third-quarter earnings, with a record $77 million bill for maintenance and restructuring at its operations.

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.


© 2005-2022 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