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

QE3 "Not Off the Table" as Euro Crisis Gives Gold Significant Upside

Commodities / Gold and Silver 2012 May 21, 2012 - 12:48 PM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleWHOLESALE MARKET spot gold prices hit a 7-session high just below $1600 per ounce in London trade early Monday, before dropping back through last week's finish at $1593 as European stock markets rose for the first time in two weeks.

Spanish and Portuguese bond prices both fell, as did "safe haven" German and US debt.


The Euro currency slipped below $1.2750 despite the G8 summit of developed-world leaders stating their commitment to Greek membership of the single currency zone and vowing to "take all necessary steps to strengthen and reinvigorate our economies and combat financial stresses."

Silver prices dropped 1.5% to $28.40 after erasing last week's 7% plunge to finish unchanged.

Spot gold traded 4.3% above last Wednesday's 5-month low at $1525 per ounce.

"Spot Gold rallied [last week] on speculation that the Feds will come through with a QE3 package," says Commerzbank in Luxembourg.

"Renewed physical demand, deteriorating European conditions, and a poor Philly Fed print [on the manufacturing index] seemed to be the catalyst for the rebound," reckons refinery and finance group MKS's Australian office.

"In the next few weeks leading up to the Greek election, there will be plenty of opportunities for people to worry about the European debt situation and the health of the Euro in general," says Reuters, quoting David Jollie at Japanese trading conglomerate Mitsui, who believes such worries should prove "positive" for gold.

"The potential for a secession in Europe and/or a US fiscal crisis represent significant upside risks to gold prices," says the latest Commodities Weekly from French investment-and-bullion bank Natixis, forecasting a major monetary response should fiscal and political problems worsen.

"As popular as it might be in some quarters to rule out [a third round of US quantitative easing], I do not think this option can be taken off the table," said Federal Reserve Bank of Atlanta President Dennis Lockhart in a speech in Tokyo this morning.

"QE3 will work under the right circumstances," said Lockhart – a voting member this year on the US central bank's policy committee. "But I don't believe such circumstances prevail at this time."

New data released Friday by US regulator the Commodity Futures Trading Commission show speculative traders in gold futures and options more than doubling their bearish bets over the last month.

Net-net as a group, so-called 'Large Speculators' – meaning those professionals not hedging a physical position for miners, refiners or bullion banks – cut their overall bullish betting by the equivalent of $3.2 billion in the week ending last Tuesday.

In volume terms, the speculative "net long" position of bullish minus bearish bets fell to the equivalent of 322 tonnes, the lowest level since December 2008, when the price of Spot Gold turned higher amid the collapse of Lehman Bros. after falling by one-third from the collapse of Bear Stearns that March.

"We do not believe the removal of trades predicated on additional liquidity and further unconventional monetary policy signal the end of the bull market in gold," says a note from analysts at investment bank Morgan Stanley today.

"We retain a positive view on gold," agrees a note from London market-maker Barclays, "given the ongoing market uncertainty, broader macro backdrop remaining positive and continued central bank gold buying."

Now the world's #1 gold consumer nation, China "should continue to implement a proactive fiscal policy and a prudent monetary policy, while giving more priority to maintaining growth," said current Chinese premier Wen Jiabao in a weekend interview.

Already moving to boost bank lending, Beijing may announce fresh stimulus measures shortly, according to the China Securities Journal – like Wen's comments, also published by the official Xinhua News Agency.

"There are prominent problems seen in areas including insufficient demand and falling profits in some industries and companies," Wen was apparently told by bureaucrats from 6 different provinces at a weekend meeting.

"Unsold cars are crowding dealer lots in cities from Guangzhou in the south to Xi’an to the west," Bloomberg News today quotes Su Hui, a vice-president at the state-backed China Automobile Dealers Association.

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.


© 2005-2019 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