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
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Market's Fed Reaction "Could Be Worrying Sign for Gold"

Commodities / Gold and Silver 2012 Dec 14, 2012 - 08:32 AM GMT

By: Ben_Traynor

Commodities

SPOT MARKET gold prices looked to be headed for a third weekly loss in a row Friday lunchtime in London, after failing to break above $1700 an ounce, while stocks and US Treasuries were little changed on the day, with no signs of progress from Washington on the so-called fiscal cliff.

Silver was also headed for a third losing week in a row, trading around $32.60 an ounce for most of this morning, as other commodity prices gained slightly.


"A lack of activity has kept precious metals largely unchanged this morning," says today's commodities note from Standard Bank.

A day earlier, gold dropped back below $1700 an ounce Thursday, despite the US Federal Reserve committing to $45 billion a month in Treasury purchases the day before.

"The bulls were making the argument that the central bank would remain easy, at least until 2015, helping provide an element of support for gold," says a note from Ed Meir, analyst at brokerage INTL FCStone.

"The bears countered that there would not be any additional easing in the pipeline between now and 2015, and also pointed out that the Fed did, after all, outline specific targets at which point it would start shrinking its bloated balance sheet...Thursday's action seems to have supported the bearish stance."

"It is perhaps a worrying sign that the latest installment of QE has had no positive impact on gold prices at all," says a note from investment bank Natixis.

"No matter which side of the Fed argument one is on," says INTL FCStone's Meir, "we suspect that much of Thursday’s selling was also triggered by the fact that investors are becoming increasingly nervous about the lack of progress emanating from the fiscal cliff talks."

President Obama and Republican House of Representatives speaker John Boehner had what statements from both parties called a "frank" meeting about the so-called fiscal cliff Thursday, adding that "lines of communication remain open" between the two.

No agreement has been reached on deficit reduction measures. Unless Congress passes new legislation, tax cut expiries and spending cuts worth an estimated $600 billion are due to kick in starting at the end of this month.

Barclays Capital meantime has cut its gold price forecast for 2013. BarCap forecasts gold will average $1815 an ounce next year, 2.4% down on the previous projection, while the investment bank's forecast for silver is unchanged at $32.50 an ounce.

"We retain a positive view on the gold market," a note from BarCap says, "but given gold's outperformance during risk on intervals and our [foreign exchange] strategists' expectation for the Dollar to strengthen beyond three months, we are revising down our forecast for 2013 modestly."
Over in Europe, discussions on a common Eurozone budget and coordination of economic reforms among Euro members were put back until June next year Friday.

European Council president Herman van Rompuy issued a statement from the European Union summit in Brussels saying he will "present possible measures and a time-bound road map" at a summit in June next year.

Eurozone inflation meantime fell to 2.2% last month, down from 2.5% in October, according to official figures published this morning. US consumer inflation data are due to be published at 08.30 EST.

Demand to buy gold in physical bullion form has seen a resurgence in recent weeks, according to Standard Bank's proprietary Gold Physical Flows Index.

Gold importers in the world's biggest gold buying nation India continued to stock up Friday, newswire Reuters reports, to ensure adequate supplies for the wedding season.

"People feel this is a good buying opportunity as prices could jump another 1000 Rupees [per 10 grams]," says Harshad Ajmera at JJ Gold House.

Activity in China's manufacturing sector meantime looks set to expand at a stronger pace this month compared to November, according to the provisional 'flash' purchasing managers index published by HSBC Friday.

China's silver market meantime is "expected to achieve even further growth in coming years" on both the demand and supply side following a decade of rapid expansion, according to a report produced by precious metals consultancy Thomson Reuters GFMS and published by the Silver Institute Thursday.

"China is now the world's second largest silver fabricator and is likely to become the second largest producer, with its share of global demand and supply standing at 17% and 14% respectively," the report says.

By Ben Traynor
BullionVault.com

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 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.

Ben Traynor Archive

© 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