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 Price Surges to Highest in Nearly Two Years On Central Bank and Brexit Haven Demand

Commodities / Gold and Silver 2016 Jun 17, 2016 - 01:59 PM GMT

By: GoldCore

Commodities

The gold price surged to their highest level in nearly two years yesterday on BREXIT concerns and deepening concerns that central banks are slowly losing control of the financial and monetary system.

Gold subsequently fell quite sharply below the key $1,300 level but remains roughly 1% higher for the week in all currencies and is on track for its third week of gains.



Asset Performance YTD 2016 (Finviz)

Ultra loose monetary policies are set to get even looser as the Federal Reserve confirmed zero percent interest rate policies are set to continue and negative interest rates deepened as Germany became the latest bond market to experience negative rates.

The backdrop of the most uncertain geo-political and economic conditions in many years is also leading to safe haven demand which pushed gold to the highest level since August 2014 touching $1,315/oz.

Sharp falls in European and Asian stock market indices this week and this year (see Table above) is also contributing to the precious metal gains. U.S. stock market indices remain buoyant for now but the fundamentals of the U.S. stock market continue to deteriorate and we look set to see a very significant correction or indeed worse in the coming months.

Gold and silver remain the top performing assets in 2016 with 21.1% and 25.4% returns in dollar terms respectively. They have seen even larger gains in sterling terms of 24.4% and 28.7% due to sterling’s depreciation on Brexit concerns.

The twin risk of terrorism and war were seen again this week after the massacre in the Orlando nightclub and deteriorating relations between Russia and the North Atlantic Treaty Organization (NATO) powers.

Nato has urged Russia to withdraw its troops and armour from Ukraine and accused Russia of “massive militarisation” around the fringes of Europe, as the alliance traded barbs with Moscow ahead of a major summit next month. The western military alliance’s plans to deploy four battalions close to Russian borders has further heightened tensions in an increasingly destabilised Europe.

The ‘clash of civilisations’ appears to be intensifying on a number of fronts alas.

On the monetary policy side of things, central banks appear increasingly desperate with the Federal Reserve now “legitimately” considering using “helicopter money” and the ECB creating euros to buy European junk debt and being urged to “lavish” consumers with “quantitative easing for the people (see News below).

The Federal Reserve confirmed Wednesday that zero interest rate policies (ZIRP) are set to continue and rates remain at a record lows. The Fed left interest rates unchanged as expected at 0.25 percent to 0.5 percent. They lowered projections for how much they expect to tighten monetary policy in the next few years due to the uncertain outlook and also cited the risks that BREXIT posed to markets in the short term.

The very patchy economic “recovery” in the U.S. and internationally have made the Fed even more dovish, with a greater number of officials now seeing scope for just a single rate increase this year, rather than two. This makes non yielding and non negative yielding gold more attractive to investors internationally.

Continuing ultra loose monetary policies by all major central banks is benefiting gold as is the increasing spectre of negative interest rates. Global sovereign debt with negative yields surpassed a whopping $10 trillion for the first time last month, according to Fitch Ratings.

Japan is by far the largest source of negative-yielding bonds. Other countries with negative bonds include Sweden, Hungary and Switzerland. The amount stood at $10.4 trillion on May 31, up 5% from $9.9 trillion on April 25, when the rating agency last measured the amount. $7.3 trillion of the total is long-term debt and $3.1 trillion is short-term debt.

ECB is creating euros to buy junk debt

14 countries now have negative yields including Germany, whose bonds went negative this week. German 10 year bund yields went below zero on ‘Brexit’ fears and due to ultra loose monetary policies. The ECB’s ongoing QE became even more radical last week and now involves creating euros to buy European junk debt.

This is a radical monetary experiment that will in time almost certainly lead to a collapse in the “safe haven” government bond market and see all major currencies devalued internationally and a reset of gold and silver to much higher levels.


Gold and Silver News
Gold inches up, set for third straight weekly gain of 1% (Reuters)
Gold surges near 2-yr high on dovish Fed, ‘Brexit’ worries (Bullion Desk)
Global Central Banks Sound Brexit Alarm as ‘Leave’ Jitters Grow (Bloomberg)
Flight to safety spells danger for riskier assets (Australian)
EU politicians urge ECB to lavish ‘helicopter money’ on consumers (FT)

Perfect Storm Of Bad Political And Economic News Will Drive Gold Higher (Forbes)
Gundlach: “Central Banks Are Losing Control” – Full Presentation (Zero Hedge)
The Fed and other central banks have lost their magic powers (Marketwatch)
Never sell your gold—and buy more: trader (Yahoo Finance)
BREXIT Would See “Massive Run” In Gold (CNBC)
Read More Here

Gold Prices (LBMA AM)
17 June: USD 1,284.50, EUR 1,142.05 and GBP 899.41 per ounce
16 June: USD 1,307.00, EUR 1,161.14 and GBP 922.01 per ounce
15 June: USD 1,282.00, EUR 1,141.49 and GBP 903.04 per ounce
14 June: USD 1,279.40, EUR 1,140.84 and GBP 904.79 per ounce
13 June: USD 1,284.10, EUR 1,139.25 and GBP 909.27 per ounce
10 June: USD 1,266.60, EUR 1,121.07 and GBP 876.87 per ounce

Silver Prices (LBMA)
17 June: USD 17.37, EUR 15.43 and GBP 12.19 per ounce
16 June: USD 17.71, EUR 15.79 and GBP 12.54 per ounce
15 June: USD 17.41, EUR 15.51 and GBP 12.26 per ounce
14 June: USD 17.25, EUR 15.37 and GBP 12.17 per ounce
13 June: USD 17.32, EUR 15.37 and GBP 12.23 per ounce
10 June: USD 17.32, EUR 15.33 and GBP 12.01 per ounce

This update can be found on the GoldCore blog here.

Mark O'Byrne

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 http://www.goldcore.com/uk/

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

© 2005-2022 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