Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
THEY DON'T RING THE BELL AT THE CRPTO MARKET TOP! - 20th Dec 24
CEREBUS IPO NVIDIA KILLER? - 18th Dec 24
Nvidia Stock 5X to 30X - 18th Dec 24
LRCX Stock Split - 18th Dec 24
Stock Market Expected Trend Forecast - 18th Dec 24
Silver’s Evolving Market: Bright Prospects and Lingering Challenges - 18th Dec 24
Extreme Levels of Work-for-Gold Ratio - 18th Dec 24
Tesla $460, Bitcoin $107k, S&P 6080 - The Pump Continues! - 16th Dec 24
Stock Market Risk to the Upside! S&P 7000 Forecast 2025 - 15th Dec 24
Stock Market 2025 Mid Decade Year - 15th Dec 24
Sheffield Christmas Market 2024 Is a Building Site - 15th Dec 24
Got Copper or Gold Miners? Watch Out - 15th Dec 24
Republican vs Democrat Presidents and the Stock Market - 13th Dec 24
Stock Market Up 8 Out of First 9 months - 13th Dec 24
What Does a Strong Sept Mean for the Stock Market? - 13th Dec 24
Is Trump the Most Pro-Stock Market President Ever? - 13th Dec 24
Interest Rates, Unemployment and the SPX - 13th Dec 24
Fed Balance Sheet Continues To Decline - 13th Dec 24
Trump Stocks and Crypto Mania 2025 Incoming as Bitcoin Breaks Above $100k - 8th Dec 24
Gold Price Multiple Confirmations - Are You Ready? - 8th Dec 24
Gold Price Monster Upleg Lives - 8th Dec 24
Stock & Crypto Markets Going into December 2024 - 2nd Dec 24
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Jumps to $1295 on US Fed's QE2 Shocker

Commodities / Gold and Silver 2010 Sep 22, 2010 - 07:53 AM GMT

By: Adrian_Ash

Commodities

THE PRICE OF GOLD in wholesale dealing leapt to fresh record highs vs. the Dollar at $1295 an ounce early Wednesday, after the US currency fell hard following the Federal Reserve's new policy stance, pointing to fresh "money printing" ahead.

Silver prices also rose, hitting new 30-year highs at $21.20 an ounce, as world stock markets fell.


Major-economy government bonds rose. The Dollar lost half of the ¥2.5 gains injected last week by the Bank of Japan, which sold its own currency to depress the Yen from 15-year highs.

"The Fed said exactly the opposite of what the market had been expecting," the Platts news service quotes Afshin Nabavi at Swiss refiners MKS today.

"Gold went up more than $15 in less than five minutes."

Repeating its vow to keep interest rates "exceptionally low [for an] extended period" for the US central bank also said it is "prepared to provide additional accommodation if needed to support the economic recovery" – taken as a signal that fresh quantitative easing is due.

"[Gold] continues to track a nice two-month bull channel with parameters at $1255 and $1295," says Russell Browne's latest analysis for Scotia Mocatta clients, repeating his "Elliott Wave" target of $1356.

In Asia today – where gold broke through $1290 in Tokyo trade, but China's Shanghai Gold Exchange was closed for a national holiday – "Long-liquidation was not apparent, despite the much higher prices," says one Hong Kong dealer.

Rising 1.3% vs. the Dollar since the People's Bank widened its "daily trading band" three months ago, the Chinese Yuan still saw gold hit new record highs today, gaining almost one tenth for 2010 to date.

"Gold [has a] close and positive relationship with liquidity and associated inflationary fears," writes Walter de Wet at Standard Bank today.

"The fall in the Dollar, prompted by fears of currency devaluation, has provided an added impetus [to Gold Trading] this morning."

Priced in the Euro, gold actually fell following the US Fed's announcement, pushed down by the single currency's new six-month high above $1.33.

Early Wednesday in London, the gold price in Euros slipped towards €31,000 per kilo – its lowest level in almost 3 weeks.

New data meantime showed Industrial Orders across the 16-nation Eurozone shrinking unexpectedly by 2.4% in July from June.

US home-loan applications fell last month, the Mortgage Brokers Association reported.

Retail Sales in Canada, excluding autos, contracted by 0.4% in August from July. Analysts had forecast a 0.5% rise.

"[The Fed has sparked] further unease of what [other] governments will do to weaken their currencies to support flagging economic growth," reckons Credit Agricole's senior currency analyst in London, Robin Bhar.

Tuesday's "subtle change in language" from the US Federal Reserve "pushes the door for QE2 wider," he told Reuters this morning.

Iceland's central bank meantime cut its interest rate back to 6.25% today, while minutes from the Bank of England's latest meeting showed only one UK policy-maker calling for a hike from the current 300-year low of 0.50%.

Former British Airways economist Prof. Andrew Sentance was out-voted by the other eight members, who said they saw an increased risk that "further action would become necessary to stimulate the economy."

Already 20% higher from the start of the year, the gold price in Sterling today jumped to £828 an ounce – its highest level since the new record highs set in late June.

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 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