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
Intel Empire Fights Back with Rocket and Alder Lake! - 24th Jan 21
4 Reasons for Coronavirus 2021 Hope - 24th Jan 21
Apple M1 Chip Another Nail in Intel's Coffin - Top AI Tech Stocks 2021 - 24th Jan 21
Stock Market: Why You Should Prepare for a Jump in Volatility - 24th Jan 21
What’s next for Bitcoin Price – $56k or $16k? - 24th Jan 21
How Does Credit Repair Work? - 24th Jan 21
Silver Price 2021 Roadmap - 22nd Jan 21
Why Biden Wants to Win the Fight for $15 Federal Minimum Wage - 22nd Jan 21
Here’s Why Gold Recently Moved Up - 22nd Jan 21
US Dollar Decline creates New Sector Opportunities to Trade - 22nd Jan 21
Sandisk Extreme Micro SDXC Memory Card Read Write Speed Test Actual vs Sales Pitch - 22nd Jan 21
NHS Recommends Oximeter Oxygen Sensor Monitors for Everyone 10 Months Late! - 22nd Jan 21
DoorDash Has All the Makings of the “Next Amazon” - 22nd Jan 21
How to Survive a Silver-Gold Sucker Punch - 22nd Jan 21
2021: The Year of the Gripping Hand - 22nd Jan 21
Technology Minerals appoints ex-BP Petrochemicals CEO as Advisor - 22nd Jan 21
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold Swap with BIS is Positive for Gold

Commodities / Gold and Silver 2010 Jul 07, 2010 - 07:16 AM GMT

By: GoldCore

Commodities

Best Financial Markets Analysis ArticleRisk aversion has returned today with Asian equity indices mostly down and European bourses also under pressure early after the increased risk appetite seen yesterday faded. Equities and commodities surged in value in Asia and European trade yesterday, but Wall Street did not follow through with equities giving up their early gains and ending up marginally. The increased risk appetite saw gold come under pressure again yesterday and once $1,200/oz was breached, gold quickly fell to the $1,190/oz level. Technical damage has been incurred and further falls to support at $1,160/oz seem possible.


Gold is currently trading at $1,188/oz and in euro, GBP, CHF, and JPY terms, at €946/oz, £786/oz, CHF 1,258/oz, JPY 103,518/oz respectively.

Gold in USD with 50 and 200 Day Moving Average - 6 Month (Daily)

Short term vulnerability should not obscure the fact that the supply and demand fundamentals remain sound, meaning that gold's medium and long term prospects remain sound. Premiums for gold coins remain high and it is still difficult to secure British sovereigns and other European small gold coins (Swiss franc, French franc, German mark gold coins etc.) in larger quantities. Premiums for physical bullion internationally and in Asia remain healthy and even Japan is showing an increased appetite with premiums in Tokyo rising in recent days.

The gold market continues to digest the news of the 346 tonne gold swap with the BIS. There is a lot of uncertainty regarding the news which has not been confirmed or clarified by the BIS or the IMF. The Wall Street Journal said the swap was made by central banks while another respected financial newspaper said the sale was by commercial banks (see News below).

Speculation is that it was by central banks and may have been by one or a combination of three of the PIGS - Portugal, Spain and or Greece. The news may have led to weakness in the gold market yesterday and todayas it created uncertainty and jittery traders may have sold until clarity is gained.

A central bank or central banks having to resort to swap their best performing monetary asset in order to raise funds is a further sign of the distressed state of the international financial and monetary system. The fact that the central banks swapped the gold rather than sold it is also an indication of their favourable view of gold and a sign that central banks are increasingly unlikely to liquidate gold holdings. Indeed, they look set to become net buyers of gold again in 2010.

While 346 metric tonnes of gold sounds like a lot, it is actually only worth some $13bn at current prices - miniscule compared to wholesale money markets and to foreign exchange reserves of creditor nations such as India, Russia and China. The news has created uncertainty which may lead to further short term weakness but it is bullish for gold long term.

The role of gold itself as an important safe haven currency within international currency reserves and within the monetary system is being increasingly appreciated. Indeed it is not beyond the realms of possibility that we may see gold sharply revalued in the coming months (as was done by Roosevelt in the 1930s) in order to stave off a deflationary depression and provide stability to the international monetary system.


Silver

Silver is currently trading at $17.61/oz, €14.02/oz and £11.65/oz.

Platinum Group Metals

Platinum is trading at $1,505/oz and palladium is currently trading at $434/oz. Rhodium is at $2,450/oz.

News

(Bloomberg) -- Gold demand in China, the world'ssecond-largest consumer, gained in the first half as governmentmeasures to cool the property market and falling equitiesspurred investment demand, the Shanghai Gold Exchange said. The total volume of gold traded on the exchange jumped 59percent in the first six months from a year earlier to theequivalent of 3,174.5 metric tons, said Song Yuqin, vice generalmanager at the exchange. Silver turnover soared more thanfivefold, Song told a conference in Beijing today.

(Bloomberg) -- China's gold output this year maygain 5 percent from about 313 metric tons last year, SongQuanli, deputy party secretary general at China National GoldGroup Corp., China largest gold producer, said in an interviewtoday. "But the output growth cannotkeep up with the demandgrowth so far this year given investors' enthusiasm for physicalgold holdings such as gold bars," Song said. "Ourretail branches reported 30 percent to 40 percent growth insales in the first half of this year."Separately, the company is considering listing its non-goldrelated assets in Hong Kong, Song said.

(Bloomberg) -- Russia's central bank said the valueof its gold holdings advanced 2.8 percent last month to $28.2billion, in an e-mailed statement today.That's the highest level since Bank Rossii startedreporting the value of its gold holdings in 1993.

(Bloomberg) -- South Africa's gold and foreigncurrency reserves increased 1.4 percent in June as the bullionprice rose and the dollar's rally stalled, maintaining the valueof reserves held in precious metals and other currencies.Gross reserves climbed to $42.2 billion from $41.6 billionin May, the Pretoria-based Reserve Bank said on its websitetoday. Net reserves rose to $38.2 billion from $37.9 billion,according to the central bank."The Reserve Bank has stated its commitment to steadilybuild reserves so we expect to see a modest improvement," KevinLings, chief economist at Stanlib Asset Management inJohannesburg, said before the release of the data. "Goldwould've also helped."

(Bloomberg) -- Gold may rise to higher than $1,300an ounce in the second half of this year, GFMS Ltd. ExecutiveChairman Philip Klapwijk said in slides prepared for delivery ata Beijing conference today. "Investors will remain the principal driver of prices thisyear, with abreach of $1,300 in the second half a strongpossibility," he said in the slides.

(FT) -- European commercial banks have begun using their holdings of gold to raise cash with the Bank for International Settlements, in a further sign of strains in the money markets on which many rely for funding. The BIS, the so-called "central banks' central bank", took 346 tonnes of gold in exchange for foreign currency in "swap operations" in the financial year to March 31, according to a note in its latest annual report. In a gold swap, one counterparty, in this case a bank, sells its gold to the other, in this case the BIS, with an agreement to buy it back at a later date.

This update can be found on the GoldCore blog here.

Mark O'Byrne
Director

IRL
63
FITZWILLIAM SQUARE
DUBLIN 2

E info@goldcore.com

UK
NO. 1 CORNHILL
LONDON 2
EC3V 3ND

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

W www.goldcore.com

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore 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