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 Slips in Tight Range

Commodities / Gold and Silver 2012 Oct 10, 2012 - 07:39 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleU.S. DOLLAR gold prices slipped for a third day in London on Wednesday, rallying from 2-week lows beneath $1761 per ounce as world stock markets also fell once again and industrial commodities held flat overall.

Silver bullion prices ticked higher to approach $34 per ounce. The Euro currency steadied above a 1-week low of $1.2850.


"The range [in gold prices] has been sideways since mid-September," say Scotia Mocatta's technical analysts.

"Negative divergence [in the Relative Strength Indicator] points to an imminent consolidation and short-term sell off," reckons Axel Rudolph at Commerzbank.

"Gold support is at $1755 and resistance is $1775," says the Commodities Daily from Standard Bank in London.

"Real economic data from China continues to disappoint," adds the Standard Bank note, pointing to the near-7% drop in August's rail freight from a year earlier.

"Weak freight volume data implies a bearish outlook for industrial commodities. It signals weak underlying real demand."

Gold prices in India – the world's #1 consumer market – meantime rose today to 1-week highs as the Rupee fell heavily on the currency market.

"Deals are there, but not in a big way," one private-bank dealer says.

Ahead of late October's wedding season and the run of Hindu festivals in November, "Buying momentum is slow this week," he adds.

High gold prices have pushed upper and middle-class Indian families to buy imitation or "fashion" jewelry instead, reports today's Business Standard, saying there are now 500 shops promoting such items in the state of Gujarat alone.

"The use of fashion jewelry has almost doubled in the past one year due to high gold prices," says Lalit Lathiya of Bhuvneshwari Creation in Rajkot, "and not only in India but overseas as well."

After cutting East Asian and European growth forecasts sharply this week, the International Monetary Fund today warned that the Eurozone could see capital flight of $2.8 trillion unless the region's leaders "act swiftly to restore confidence."

Italy saw its 12-month borrowing costs jump this morning from 1.69% to 1.94% at an auction of €8 billion in new short-term debt.

The Red Cross charity meantime launched a campaign specifically aimed at raising €30 million to help Spain's 300,000 poorest citizens.

Ahead of Wednesday's $21 billion auction of new US debt – part of $66bn in fund raising due this week – Treasury bonds slipped, nudging 10-year yields further above 2.0%.

"The industrialized world is stuck in a severe debt and growth crisis," says Andrew Bosomworth, head of portfolio management in Germany for US bond-fund giant Pimco, quoted by German news magazine Spiegel.

"Central banks are fighting the disease with monetary infusions of previously unknown proportions, and the side effect is a slow but dangerous devaluation of money."

"Gradual inflation has a numbing effect. It impoverishes the lower and middle class, but they don't notice."

Writing in the Irish Times, "The monetary environment has rarely looked more favourable for gold," says economic analyst and consultant Charlie Fell.

"The structural headwinds to robust economic growth, not to mention central bank rhetoric, virtually assure negative real short-term policy rates for many years to come. As a result, it is highly unlikely that the bull market in gold is set to end in the immediate future."

Following largely peaceful protests in Athens on Tuesday against German chancellor Merkel – who visited prime minister Samaras to discuss the next €31.5 billion of bail-out funds – Greek unions today called an anti-austerity general strike for Thursday next week, 18 October.

So-called "fast-track" approvals of four gold mining projects in Greece will see it become Europe's largest producer by 2016, according to a Bloomberg report.

"The most fundamental problem of the mining industry," said Mamphela Ramphele, chairwoman of the world's fourth-largest listed producer Gold Fields in an interview yesterday, "is that it has a 19th century business model which depends on cheap labor, low-skilled labor, and therefore large numbers of workers."

Some 24,000 GoldFields workers remain on illegal strike, with other wildcat protests demanding higher wages still shutting some 40% of South Africa's total gold mining output.

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.


© 2005-2022 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