Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Amazon AMZN Stock PRIMEDAY SALE! Trend Analysis - 20th Apr 21
Stock Market Sentiment Speaks: You May Not Believe My 2021 Targets - 20th Apr 21
Stock Market Phase Two Projection - 20th Apr 21
Are Precious Metals & Miners Starting A New Longer-Term Bullish Trend? - 20th Apr 21
Inflation: First the Gain, Then the Pain… - 20th Apr 21
8 Stock Market Indicators in 1: Here's the Message of the Panic/Euphoria Model - 19th Apr 21
Gold - You Can Win a Battle, but Still Lose the War - 19th Apr 21
Will Interest Rates Rally Further Push Gold Price Down? - 19th Apr 21
Gold Fireworks Doubt the Official Inflation Story - 19th Apr 21
YuanPay Team Discuss The Process Of Crypto Diversification - 19th Apr 21
Central Banks May Ramp Up Gold Buying - 18th Apr 21
How to Get Rid of Driveway Weeds With Just WATER! 6 Months later NO Weeds, Ultimate Killer! - 18th Apr 21
State of the European Markets - DAX, FTSE, CAC, AEX, SMI, IBEX 35, S&P/MIB, Euro Stoxx 50, RTS - 18th Apr 21
Einvestment Fund: What You Need To Know About Investments - 18th Apr 21
Google Alphabet (GOOG) AI Deep Mind Stock Trend Analysis - 17th Apr 21
Stocks and Bonds Inflationary Slingshot - 17th Apr 21
Best Smartphone Selfie Stick Tripod Review by ATUMTEK Works with Samsung Galaxy and Iphone - 17th Apr 21
How to Give Budgie's First Bath | Easy Budgie Bathing and Water Training with Lettuce - 17th Apr 21
Record-breaking Decrease in New Passenger Vehicle Sale in Europe - 17th Apr 21
US Stocks Climb A “Wall Of Worry” To New Highs - 16th Apr 21
Gold’s Singular Role - 16th Apr 21
See what Anatomy of a Bursting Market Bubble looks like - 16th Apr 21
Many Stock Market Sectors Are Primed For Another Breakout Rally – Are You? - 16th Apr 21
What Skyrocketing US Home Prices Say About Inflation - 16th Apr 21
Still a Bullish Fever in Stocks? - 16th Apr 21
Trying to Buy Coinbase Stock on IPO Day - Institutional Investors Freeze out Retail Investors - 15th Apr 21
Stocks or Gold – Which Is in the Catbird Seat? - 15th Apr 21
Time For A Stock Market Melt-Up - 15th Apr 21
Stocks Bull Market Progression Now Shows Base Metal Strength - 15th Apr 21
AI Tech Stocks Buy Ratings, Levels and Valuations - 14th Apr 21
Easy 10% to 15% Overclock for 5600x, 5900x, 5950x Using AMD Ryzen Master Precision Boost Overdrive - 14th Apr 21
The Current Cannabis Sector Rally Is Pointing To Another Breakout - 14th Apr 21
U.S. Dollar Junk Bond Market The Easiest Money in History - 14th Apr 21
The SPY Is Nearing Resistance @ $410… What Is Next? - 14th Apr 21
The Curious Stock Market Staircase Rally - 14th Apr 21
Stocks are Heating Up - 14th Apr 21
Two Methods in Calculating For R&D Tax Credits - 14th Apr 21
Stock Market Minor Correction Due - 13th Apr 21
How to Feed Budgies Cucumbers - Best Vegetables Feeding for the First Time, Parakeet Care UK - 13th Apr 21
Biggest Inflation Threat in 40 Years Looms over Markets - 13th Apr 21
How to Get Rich with the Pareto Distribution - Tesco Example - 13th Apr 21
Litecoin and Bitcoin-Which Is Better? - 13th Apr 21
The Major Advantages Of Getting Your PhD Online - 12th Apr 21
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21
The History of Bitcoin Hard Forks - 10th Apr 21
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold Price Forecasts Cut by Bank Analysts Again as US Fed Tries to Temper "Taper Talk"

Commodities / Gold and Silver 2013 Jun 25, 2013 - 02:07 PM GMT

By: Adrian_Ash

Commodities

PRECIOUS METALS rallied in London on Tuesday morning as European stock markets also bounced with commodity prices.

Gold and silver recovered half of yesterday's 1.7% and 3.1% drops respectively.

The US Dollar eased back on the currency market, as did major government bond yields.


"The gold price [is] trad[ing] erratically without any clear direction," say London bullion dealers Standard Bank in their daily note, "due to residual concerns over the Fed's likely reduction in monetary stimulus, coupled with growing concerns over Chinese banking liquidity."

The People's Bank of China said today it has lent short-term money to some institutions to keep money-market interest rates at a "reasonable level" – its first statement of action since short-term rates in Shanghai spiked above 10% earlier this month.

"There's room for further [gold] price declines before a meaningful consolidation," writes bullion market-maker Scotia Mocatta's strategist Russell Browne.

"Our target for the move is $1155-1156, and there are no big levels of support between here and there."

After major bank analysts last week cut their silver price forecasts, London bullion bank HSBC yesterday cut both its 2013 and 2014 gold price forecasts by 10%, down to $1396 and $1435 per ounce respectively.

"Clearly, recent market events show we did not cut [forecasts] enough" in previous revisions, HSBC added.

Fellow market-maker Deutsche Bank meantime cut its 2013 gold price forecast by 7% to $1431 per ounce, while Morgan Stanley cut its forecast by 5% to $1409.

"This year has seen a significant change in fortunes for the gold market," says Deutsche, "driven by a turn in the US interest rate cycle, an increasingly bullish outlook for the US Dollar and a reallocation among global investors from fixed income into equities."

With foreign money being pulled from investments in India – the world's No.1 market for physical gold – the possible end of US quantitative easing "[is a] big negative for the Rupee as flows dwindle further," says Religare Capital Markets in a note from Mumbai.

Russian government debt today rallied from a sell-off which drove interest rates up to an 18-month high.

Russia added to its gold reserves for the 8th month running in May, new data from the International Monetary Fund showed Tuesday, taking it 996 tonnes – the 7th largest national hoard, ahead of Japan and behind Switzerland.

Gold buying by emerging-market central banks "is one of the underpinnings for gold in the long term," reckons ANZ analyst Victor Thianpiriya.

Amongst Asian households and investors, however, "There is only a slight improvement in demand right now due to the price drop," Reuters today quotes Dick Poon at German refining group Heraeus' Hong Kong office.

"It's definitely not up to April levels. Part of the reason is weak seasonal [gold] demand. But economic factors and China growth are also hurting."

Longer-term says new analysis from Barclays bank, "The US cyclical position continues to look relatively healthy versus other developed market countries, where central banks are either in easing mode or are not expected to tighten policy any time soon."

"We expect the Dollar rally to broaden as the second half of 2013 progresses," writes the New York head of FX research at Barclays, Jose Wynne.

"Anybody who holds gold in Dollar terms," said trader and newsletter advisor Dennis Gartman to CNBC Monday, "finds himself in a very uncomfortable position."

"Gold needs fuel, [it] needs monetary aggressiveness to push it up."

US Fed chairman Ben Bernanke said last week that the central bank may start 'tapering' its quantitative easing, and perhaps end the program by mid-2014.

Provided that inflation stays low and the US Dollar is strong, says Swiss bank UBS in a note, "Investors are likely to regard QE-insurance [meaning gold] as obsolete."

"You don't walk up to a lion and flinch," said Dallas Fed president Richard Fisher in a speech in London on Monday, commenting on the sell-off in all asset classes following Fed chairman Bernanke's comments.

"Big money does organise itself somewhat like feral hogs," said Fisher. "If they detect a weakness or a bad scent, they'll go after it."

Fisher added, however, that the word "exit" is "not appropriate."

Speaking at a separate event Monday, non-voting Fed member Narayana Kocherlakota of the Minneapolis Fed said the US central bank "[has to] hammer it every time we talk about policy" that interest rates will stay "highly accommodative...for a considerable time after the asset purchase program ends and the economic recovery strengthens" – a key phrase from recent Federal Reserve statements.

Although interest rates and central-bank asset purchases "must return to more normal conditions at some point," said outgoing Bank of England governor Mervyn King to the UK parliament today, "that point is not today."

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 2013

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.

Adrian Ash 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

6 Critical Money Making Rules