Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and Silver Take a Beating from Goldman Sachs

Commodities / Gold and Silver 2013 Apr 11, 2013 - 05:12 PM GMT

By: Adrian_Ash

Commodities

The WHOLESALE PRICE of gold rallied from 1-week lows against the Dollar on Thursday morning, but continued to fall for UK and Euro investors, hitting 4- and 2-month lows respectively.

World stock markets continued to rise, while major government bonds slipped, commodities held flat, and silver bullion rose back above $27.50 per ounce.


"Precious metals took a beating [on Wednesday]," notes Germany's Commerzbank, with gold "leading the way" by falling more than1.5%.

"Goldman Sachs came out with a top trade recommendation to sell Comex gold [futures], which started the move down."

That tip was followed by minutes from the US Federal Reserve's latest policy meeting, released at 9am after being mistakenly shared with lobbyists and lawmakers.

A leaked paper from the European Commission then included a proposal for Cyprus to sell 10 of its 13.9 tonnes in central-bank gold as part of the bankrupt island's €10 billion bail-out program.

"The Cypriot authorities have committed to sell the excess amount of gold reserves owned by the Republic," says the 'template' detailed in the paper.

"This is estimated to generate one-off revenues to the state of €0.4bn via an extraordinary pay-out of central bank profits."

Under the currency union's political treaty, however, central banks must be independent "from Community institutions or bodies, from any government of a Member State or...any other body."

That independence specifically includes not financing state deficits through the sale of central-bank assets – a point stressed by the European Central Bank when it rebuked a 2009 attempt by Silvio Berlusconi's administration to levy a 6% tax on the Banca d'Italia's 2,450-tonne gold bullion reserves.

"No such thing has been discussed or is in the process of being discussed," said Aliki Stylianou, a spokesperson at the Central Bank of Cyprus, to CNBC today.

"There are so many rumors flying about and this is just one of them."

"Ten tonnes of gold [is] not enough to significantly affect the market," adds Swiss refinery and finance group MKS in a note.

But even so, the leaked plan "has been a psychological blow to the market," counters James Steel at London market-maker HSBC, quoted by the Financial Times.

"The gold price has taken a pretty hard tumble."

Yesterday's minutes from the US Fed's mid-March policy meeting – where both interest rates and bond-buying levels were left unchanged – meantime revealed that "a few participants" would like to end its asset-purchase scheme "relatively soon."

Other attendees – again un-named, with their voting status left unclear – felt that "economic conditions would likely justify continuing the [quantitative easing] program at its current pace at least until late in the year."

"Many participants [however] emphasized" the need to see strong, sustainable improvement in the US labor market before the current $85 billion-per-month is reduced.

Today in Tokyo, new Bank of Japan governor Haruhiko Kuroda – who last week launched $1.4 trillion in QE over the next 2 years – tempered his previous comments by saying the central bank will treat its 2% annual inflation target "flexibly".

"If there is any serious asset market bubble appearing or approaching, of course we will take necessary measures," Kuroda told the FT in an interview.

The People's Bank of China meanwhile said this morning that its foreign exchange reserves grew 3.8% in the first 3 months of this year – the fastest pace in nearly 2 years – to hit fresh all-time records above $3.4 trillion.

"[We're seeing] an even greater demand for gold by China during price pullbacks, aside from the general uptrend," says a note from Mike Dragosits at TD Securities in Toronto, commenting on Wednesday's new gold import figures.

"China's demand for gold has not wavered in the face of all the negativity in the market surrounding the end to the gold bull run."

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

© 2005-2022 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