Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Dow Stock Market Short-term Trend Analysis - 15th Oct 19
The Many Aligning Signals in Gold - 15th Oct 19
Market Action Suggests Downside in Precious Metals - 15th Oct 19
US Major Stock Market Indexes Retest Critical Price Channel Resistance - 15th Oct 19
“Baghad Jerome” Powell Denies the Fed Is Using Financial Crisis Tools - 15th Oct 19
British Pound GBP Trend Analysis - 14th Oct 19
A Guide to Financing Your Next Car - 14th Oct 19
America's Ruling Class - Underestimating Them & Overestimating Us - 14th Oct 19
Stock Market Range Bound - 14th Oct 19
Gold, Silver Bonds - Inflation in the Offing? - 14th Oct 19
East-West Trade War: Never Take a Knife to a Gunfight - 14th Oct 19
Consider Precious Metals for Insurance First, Profit Second... - 14th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - 13th Oct 19
The Most Successful IPOs Have This One Thing in Common - 13th Oct 19
Precious Metals & Stock Market VIX Are Set To Launch Dramatically Higher - 13th Oct 19
Discovery Sport EGR Valve Gasket Problems - Land Rover Dealer Fix - 13th Oct 19
Stock Market US Presidential Cycle - Video - 12th Oct 19
Social Security Is Screwing Millennials - 12th Oct 19
Gold Gifts Traders With Another Rotation Below $1500 - 12th Oct 19
US Dollar Index Trend Analysis - 11th Oct 19
China Golden Week Sales Exceed Expectations - 11th Oct 19
Stock Market Short-term Consolidation Does Not change Secular Bullish Trend - 11th Oct 19
The Allure of Upswings in Silver Mining Stocks - 11th Oct 19
US Housing Market 2018-2019 and 2006-2007: Similarities & Differences - 11th Oct 19
Now Is the Time to Load Up on 5G Stocks - 11th Oct 19
Why the Law Can’t Protect Your Money - 11th Oct 19
Will Miami be the First U.S. Real Estate Bubble to Burst? - 11th Oct 19
How Online Casinos Maximise Profits - 11th Oct 19
3 Tips for Picking Junior Gold Stocks - 10th Oct 19
How Does Inflation Affect Exchange Rates? - 10th Oct 19
This Is the Best Time to Load Up on These 3 Value Stocks - 10th Oct 19
What Makes this Gold Market Rally Different From All Others - 10th Oct 19
Stock Market US Presidential Cycle - 9th Oct 19
The IPO Market Is Nowhere Near a Bubble - 9th Oct 19
US Stock Markets Trade Sideways – Waiting on News/Guidance  - 9th Oct 19
Amazon Selling Fake Hard Drives - 4tb WD Blue - How to Check Your Drive is Genuine  - 9th Oct 19
Whatever Happened to Philippines Debt Slavery?  - 9th Oct 19
Gold in the Negative Real Interest Rates Environment - 9th Oct 19
The Later United States Empire - 9th Oct 19
Gold It’s All About Real Interest Rates Not the US Dollar - 8th Oct 19
A Trump Impeachment Would Cause The Stock Market To Rally - 8th Oct 19
The Benefits of Applying for Online Loans - 8th Oct 19
Is There Life Left In Cannabis - 8th Oct 19
Yield Curve Inversion Current State - 7th Oct 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast Oct - Dec 2019 by Nadeem Walayat

Gold and Silver Jump as Global Inflation Rises

Commodities / Gold and Silver 2011 Feb 15, 2011 - 09:07 AM GMT

By: Adrian_Ash

Commodities

THE PRICE OF GOLD jumped Tuesday morning in London, hitting $1375 per ounce and setting four-week highs for Dollar, Euro and Sterling investors, as world stock markets again held flat and commodity prices rose.

The silver price rose another 1% to $30.88 per ounce – its best level of 2010 so far.


Major-economy government bonds meantime slipped in price, nudging interest rates higher, after the world's second and fifth largest economies – China and the UK – both reported rising consumer-price inflation.

"Gold's setback at the start of 2011 is on balance likely to be short-lived," says February's edition of Metals Monthly from the VM Group in London, written and published for ABN AMRO Bank.

"In the US, record-low interest rates will remain as long as the Fed struggles to significantly reduce unemployment. In Europe, the rolling debt crisis should continue to create economic uncertainty."

Consumer-price inflation in the UK rose to reach 4.0% year-on-year in Jan., new data showed on Tuesday. That initially disappointed currency traders expecting Sterling to rise in anticipation of higher interest rates. But the Pound then jumped after Bank of England governor Mervyn King admitted "real differences of view" within his policy team in the open letter to the UK chancellor which he's required to write when inflation moves sharply away from the UK's official target of 2.0%.

"[Trying] to bring inflation back to the target quickly risks generating undesirable volatility in output," Dr.King goes on.

The gold price today spiked to £857 per ounce in Sterling, and rose above €32,700 per kilo for Eurozone savers – its highest level since Jan. 20th – as new data showed Eurozone GDP growth and Germany's ZEW economic sentiment survey both coming in below analyst forecasts.

"China’s central bank will be under pressure to tighten monetary policy further," says the VM Group,  but immediate hike seem "unlikely" after the surprise rise made over the Chinese New Year holidays.

New figures released by Beijing late Monday showed consumer-price inflation lagging analyst forecasts in January, rising to 4.9% from Dec.'s 4.6% annual pace.

The National Bureau of Statistics confirmed that it made several changes to its methodology. New Chinese bank lending meantime hit 1.04 trillion Yuan ($151bn) Beijing said, again lagging analyst forecasts.

"The relationship between Chinese inflation and the gold price is perhaps tenuous," says VM, "but we are of the view that it can only be bullish for the gold price as the metal’s allure as a store of wealth increases."

On the political front, meantime, members of the Iranian parliament called for the execution of opposition leaders after Monday's demonstrations in Tehran – "very clearly and directly" supported by US secretary of state Hillary Clinton – left one protester dead.

Yemen also saw another anti-government rally, and a man in Bahrain, attending the funeral of a protester shot dead yesterday, was reportedly shot dead by security forces.

Prime minister Silvio Berlusconi of Italy – where the interior ministry today called for Europe-wide action on the influx of refugees from Tunisia – was indicted for abuse of power and paying for sex with an under-age girl.

"Rising tensions and the threat of political instability spreading across the MENA region [middle East and near-Asia] has dampened appetite for risk and seen renewed safe-haven buying of precious metals," says today's note from Standard Bank.

"The lower-than-expected print of China’s consumer inflation has also emboldened investors as fears of monetary tightening – and consequently lower global liquidity – have eased."

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 2011

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.


© 2005-2019 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

6 Critical Money Making Rules