Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
JOHNSON & JOHNSON (JNJ) Big Pharama AI Mega-trend Investing 2020 - 25th Jan 20
Experts See Opportunity in Ratios of Gold to Silver and Platinum - 25th Jan 20
Gold/Silver Ratio, SPX, Yield Curve and a Story to Tell - 25th Jan 20
Germany Starts War on Gold  - 25th Jan 20
Gold Mining Stocks Valuations - 25th Jan 20
Three Upside and One Downside Risk for Gold - 25th Jan 20
A Lesson About Gold – How Bullish Can It Be? - 24th Jan 20
Stock Market January 2018 Repeats in 2020 – Yikes! - 24th Jan 20
Gold Report from the Two Besieged Cities - 24th Jan 20
Stock Market Elliott Waves Trend Forecast 2020 - Video - 24th Jan 20
AMD Multi-cores vs INTEL Turbo Cores - Best Gaming CPUs 2020 - 3900x, 3950x, 9900K, or 9900KS - 24th Jan 20
Choosing the Best Garage Floor Containment Mats - 23rd Jan 20
Understanding the Benefits of Cannabis Tea - 23rd Jan 20
The Next Catalyst for Gold - 23rd Jan 20
5 Cyber-security considerations for 2020 - 23rd Jan 20
Car insurance: what the latest modifications could mean for your premiums - 23rd Jan 20
Junior Gold Mining Stocks Setting Up For Another Rally - 22nd Jan 20
Debt the Only 'Bubble' That Counts, Buy Gold and Silver! - 22nd Jan 20
AMAZON (AMZN) - Primary AI Tech Stock Investing 2020 and Beyond - Video - 21st Jan 20
What Do Fresh U.S. Economic Reports Imply for Gold? - 21st Jan 20
Corporate Earnings Setup Rally To Stock Market Peak - 21st Jan 20
Gold Price Trend Forecast 2020 - Part1 - 21st Jan 20
How to Write a Good Finance College Essay  - 21st Jan 20
Risks to Global Economy is Balanced: Stock Market upside limited short term - 20th Jan 20
How Digital Technology is Changing the Sports Betting Industry - 20th Jan 20
Is CEOs Reputation Management Essential? All You Must Know - 20th Jan 20
APPLE (AAPL) AI Tech Stocks Investing 2020 - 20th Jan 20
FOMO or FOPA or Au? - 20th Jan 20
Stock Market SP500 Kitchin Cycle Review - 20th Jan 20
Why Intel i7-4790k Devils Canyon CPU is STILL GOOD in 2020! - 20th Jan 20
Stock Market Final Thrust Review - 19th Jan 20
Gold Trade Usage & Price Effect - 19th Jan 20
Stock Market Trend Forecast 2020 - Trend Analysis - Video - 19th Jan 20
Stock Trade-of-the-Week: Dorchester Minerals (DMLP) - 19th Jan 20
INTEL (INTC) Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 18th Jan 20
Gold Stocks Wavering - 18th Jan 20
Best Amazon iPhone Case Fits 6s, 7, 8 by Toovren Review - 18th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold Adds 1% for the Week as Eurozone Debt Default Looks Certain

Commodities / Gold and Silver 2011 May 13, 2011 - 08:41 AM GMT

By: Adrian_Ash


Best Financial Markets Analysis ArticleDOLLAR PRICES to buy gold continued to rally in London on Friday morning, rising as high as $1516 per ounce before easing back – less than 4% off early May's all-time high – while stock and commodity markets recovered some of Thursday's losses.

Silver prices continued Thursday's late rebound, rising to $36.47 per ounce – a rise of nearly 12% from yesterday's 11-week low – before dipping back down towards $35.

"Despite the fact that gold prices have been driven primarily by the weakness/strength of the Dollar in recent weeks, concerns regarding the economic situation in Greece brought Europe back into focus," said French investment bank and bullion dealer Natixis in its weekly commodities note on Thursday.

The Euro price to buy gold held steady this week – even as Dollar gold moved sharply – trading in a tight range around €34000 per kilogram (€1055 per ounce).

The higher Euro gold price reflects "a renewed focus on Europe's sovereign fiscal problems," says Natixis.

"Ireland, Portugal and Greece will probably all need to restructure," believes James Shugg, London-based senior economist at Westpac Banking Corp, speaking to Bloomberg.

"They are continually going to need more and more bailout funds, and at some point the decision will be made to draw the line and get creditors to participate."

A poll published by the newswire on Friday suggests that 85% of investors and analysts using Bloomberg's data services now think Greece will default on its sovereign debt, while more than half said that they also see Portugal and Ireland doing the same.

"All these countries will go bust at some stage," reckons Wilhelm Schroeder, fund manager for Schroeder Equities in Munich. "I just can't see a scenario in which these countries get out of their debt problems."

The price to buy gold in Sterling meantime rose to £928.42 at Friday morning's London Fix – a 2% gain for the week and just 1% beneath its all-time high of May 3 – as the Pound fell against the Euro following better-than-expected GDP growth figures from Germany and France.

"The UK economy looks pretty lackluster...which supports the view that [interest] rates are going to rise faster in the Eurozone", reckons Neil Jones, head of European hedge-fund sales at Mizuho Corporate Bank.

"That's going to keep the Pound among the laggards of the currency world."

Germany's GDP grew by 1.5% in the first quarter of 2011, while that of France was up 1%, according to official figures. UK GDP growth over the same period is estimated at 0.5%

Going into the weekend, gold in Dollars had gained around 1% by Friday lunchtime London time, while silver was almost exactly where it started the week.

"Silver is looking more and more like a bubble," said Saxo Bank senior manager Ole Hansen on Thursday.

Since hitting a peak of $49.63 on 25 April, spot silver prices have dropped as low as $32.44 – a 35% loss – leading one Hong Kong dealer to liken the market to "a pinball machine".

In Beijing yesterday the People's Bank of China (PBoC) raised commercial banks' reserve requirements for the fifth time this year. From May 18, commercial banks will have to hold reserves equivalent to 21% of customers' deposits.

"The room for further [interest] rate hikes is quite small this year on concerns of hot money and economic growth," reckons Lu Ting, economist for Bank of America Merrill Lynch in Hong Kong.

"We surely expect more reserve requirement ratio hikes."

Meantime in India – the world's biggest market for physical gold – figures from Natixis suggest the demand from India to buy gold "could have increased as much as five-fold" in the weeks leading up to the Akshaya Tritiya festival on May 6.

"Since the start of May, physical gold demand has been strong, "adds Walter de Wet, London-based commodity strategist at Standard Bank." While consistent physical buying interest has come from India specifically, we are witnessing a broader interest from Asia in general."

By Ben Traynor

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 2011

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 - 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