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
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
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Hits 4-Month Low as Markets Fear Greek "Knock-On Effects"

Commodities / Gold and Silver 2012 May 09, 2012 - 06:33 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleSPOT MARKET gold bullion prices fell to their lowest level in four months during Wednesday morning's London trading, hitting $1581 an ounce – 3.7% down on the week so far – while European stock markets and commodities also fell and US Treasuries gained, with Greek uncertainty continuing to cast a shadow.

A day earlier, gold fell below $1600 for the first time since early January.


"Gold seemed to know only one direction today – down," says Tuesday's note from Swiss precious metals group MKS.

"The bearish close opens up a full retracement to the December low of $1522," adds the latest technical analysis from bullion bank Scotia Mocatta.

Silver bullion fell to $28.69 per ounce – also a four-month low, and 5.6% down on last week's close.

On the currency markets, the Euro failed to regain $1.30, after falling back through that level yesterday having breached it on Monday for the first time since February.

Sterling meantime hit its highest level since August 2009 on a trade-weighted basis. The stronger Pound saw Sterling gold prices drop to £982 per ounce on Wednesday, their lowest level since last July.

On the New York Comex, open interest in gold futures trading rose to the equivalent of 1312.5 tonnes yesterday – up 2.4% on Tuesday last week – though it remains broadly in the middle of its range for the last five years.

It will not be known however what proportion of these positions were long and short until the Commodity Futures Trading Commission publishes its weekly Commitments of Traders report on Friday.

The volume of gold bullion held by the world's biggest gold ETF, SPDR Gold Trust (GLD), remained unchanged Tuesday from a day earlier at just under 1275 tonnes.

GLD volumes did though spike higher yesterday, more than doubling from a day earlier to 17.8 million shares – although Monday's volume was towards the lower end of the recent range.

The largest volume for GLD trading this year was 44 million on February 29, when gold fell $100 an ounce following Federal Reserve chairman Ben Bernanke's appearance before Congress.

Alexis Tsipras , the leader of Greece's left wing Syriza, which came second in Sunday's election, will continue his efforts to form a government today, according to press reports.

The mandate to form a government passed to Tsipras after first-placed New Democracy was unable to form a coalition. The Syriza leader has outline a five-point plan which includes cancelling the terms of Greece's bailout, suspending service payments on public debt, and investigating Greece's banking sector.

"Voters [on Sunday] rejected the barbarous policies in the bailout deal," said Tsipras Tuesday.

"They abandoned the parties that support it, effectively abolishing plans for [public sector] sackings and additional spending cuts...the popular verdict clearly renders the bailout deal invalid."

Tsipras is today due to meet the leaders of New Democracy and third-placed Pasok – former coalition partners that backed Greece's latest bailout and who both saw their shares of the vote fall on Sunday.

Many analysts, however, say they do not believe Tsipras will gain the agreements he needs to form a government.

"Mr. Tsipras asked me to put my signature to the destruction of Greece," said New Democracy leader Antonis Samaras on Tuesday.

"I will not do this. The country cannot afford to play with fire."

Should Tsipras fail to form a government, the mandate would pass to former Greek finance minister and Pasok leader Evangelos Venizelos.

"The Greek people asked for two things," said Venizelos Tuesday.

"For Greece to stay safely in Europe and the Euro and at the same time to seek the best possible change in [bailout] terms so that citizens and growth can be helped."

"Greece needs to be aware," warned European Central Bank executive board member Joerg Asmussen Tuesday, "that there is no alternative to the agreed reform program if it wants to remain a member of the Eurozone."

"A Greek return to the polls in mid-June looks increasingly likely," says Malcolm Barr, London-based economist at JPMorgan Chase.

"There is little doubt that the drop in support for New Democracy and Pasok has raised the probability of an eventual Euro exit."

"Greece in itself isn't a big issue," adds Adrian Cattley, European equity strategist at Citi.
"What does matter of course is the knock-on effects and contagion fears and what that would mean for the wider market."

Here in the UK, prime minister David Cameron described the Euro as "a project in transition" in a newspaper interview published Wednesday.

"There's nowhere in the world that has a single currency without having more of a single government," said Cameron, although he added that "all these countries have to make their own choices" and that the Eurozone project "could go in a number of different ways".

Spain's government will tell the country's banks to set aside an additional €35 billion as provision against loans made to the construction sector, newswire Reuters reports.

Ratings agency Moody's meantime will begin cutting the credit ratings of over 100 banks this month, which could increase their funding costs and force them to reduce lending, according to Bloomberg.

China meantime has been buying oil from Iran and paying with Yuan and gold bullion, according to the Wall Street Journal.

By Ben Traynor
BullionVault.com

Gold price chart, no delay   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.(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