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 Fall as Fresh Crisis Whacks the Euro

Commodities / Gold and Silver 2010 Mar 24, 2010 - 08:30 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleWHOLESALE GOLD and silver prices fell once again on Wednesday morning in London, dropping almost 2% for Dollar investors as world stock markets fell together with government bonds, commodities, and non-US currencies.

The Euro sank to a 10-month low against the Dollar after Fitch Ratings downgraded the status of Portugal's long-term government debt.


European Central Bank policy-maker Lorenzo Bini Smaghi told Germany's Die Zeit newspaper that "Those who are interested in economic and monetary stability in Europe should be against" the Washington-based International Monetary Fund (IMF) having any role in bailing out struggling governments like Greece.

"To make a provocative statement: People should go to the German constitutional court if the IMF is called in."

The gold price in Euros today held above €817 an ounce as the single currency fell, almost level with last week's finish after recovering a 0.9% drop.

Silver prices for Euro investors were also little changed, trading north of €400 per kilo.

Gold priced in Dollars, however, flirted with 6-week lows at $1090 an ounce after recording its lowest London Gold Fix since Feb 25th.

Silver today recorded its lowest London Fix since March 2nd.

"[Precious metals] are holding relatively well all things considered" said one London dealer on Wednesday, pointing to the rising Dollar and weakening oil.

"Gold is holding quite well despite the Euro collapsing," agreed Michael Kempinski at Commerzbank in Luxembourg, speaking to Dow Jones Newswire.

Typically moving in the same direction against the Dollar, the price of gold and the Euro have split apart this month, cutting their daily correlation from a long-run average of +0.51 to virtually zero.

Gold's correlation with the Euro/Dollar exchange rate would stand at +1.0 if they moved exactly in lock-step. A reading of minus 1.0 would mean they moved precisely opposite each day.

"The market remains edgy," says a note from MKS Finance, part of the Pamp refinery group in Switzerland, "and investors should expect more volatility in the coming days."

Wednesday's fresh 0.8% drop in the Euro came despite a raft of strong forward-looking data from Germany.

The currency zone's single largest economy saw the Ifo survey of business expectations rise sharply this month, as did the Markit survey of manufacturing and service-sector managers.

Crude oil and other commodity prices today fell some 1.3% on average after a sharp drop in transportation sales weighed on last month's durable goods orders report.

"I don't believe this is yet the time to be tightening monetary policy," said San Francisco Federal Reserve president Janet Yellen – the White House's candidate for Fed vice-chairman – in a speech earlier this week.

Zero interest rates are "currently appropriate in my view," she explained, "because the economy is operating well below its potential and inflation is subdued."

"[US] monetary policy is likely to continue to be accommodative for an extended period of time," confirmed Chicago Fed president Charles Evans, speaking in Shanghai and defining "extended period" as six months or longer.

Here in London meantime on Wednesday, Labour finance minister Alistair Darling crossed a picket-line of striking civil servants to deliver his last government budget before the UK General Election, due before June.

Promising "to bring down borrowing [from a record 14% of GDP] in a way that does not damage the recovery or frontline services people rely on," the Chancellor's speech saw the Pound fall through $1.49, its lowest level in two weeks and just 1¢ above a 10-month low.

The gold price in Sterling turned higher

By Adrian Ash
BullionVault.com

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
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 2010

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