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 Headed for Weekly Gain Despite Dollar Strength

Commodities / Gold and Silver 2012 Nov 09, 2012 - 11:23 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleSPOT PRICES in the wholesale gold bullion market traded above $1730 an ounce Friday morning in London, having earlier touched a two-week high, while stocks fell and the Dollar and US Treasury bonds gained, with analysts suggesting weak growth and monetary policy are likely to persist.


Silver bullion traded close to $32.30 an ounce for most of this morning, 4.3% up on the week, while oil and copper prices ticked lower.

"Precious metals continue to push higher, with the rest of the complex being led by gold," says Marc Ground, commodities strategist at Standard Bank.

"In spite of Dollar strength, the market appears to continue to take comfort from Obama's re-election and the implied support this gives to continued monetary accommodation from the Fed."

Heading into the weekend, gold bullion looks set to record its first weekly gain since the start of October, having risen more than 3% since the start of the week.

"Renewed inflows into gold ETFs are responsible for the increase in price," says a note from Commerzbank, "having totaled 10.5 tonnes in the past three days alone."

Gold's 1.7% jump on Tuesday could have been caused by a gold purchase made by the Soros Fund, Standard Bank's Yuichi Ikemizu writes in his daily 'Bruce Report' today, citing a rumor circulating among New York traders.

Gold traders are at their most bullish since August 24, according to newswire Bloomberg, which reports that 25 of 33 analysts polled say they expect gold bullion to rise next week. Friday August 24 saw the first of five consecutive weekly gains for spot gold.

Here in Europe, the European Central Bank is "by and large, done" with assisting Greece, ECB president Mario Draghi told a press conference Thursday.

"On Greece, we certainly cannot do monetary financing," Draghi said, though he added that the ECB did agree a part of Greek debt restructuring back in February that it will forego profits on holdings of Greek debt bought under its Securities Markets Programme.

"What happens is that these profits naturally accrue to the central banks that are members of the Eurosystem...[who may then] transfer these profits to the governments and then it is up to the governments to decide whether they want to re-use these profits for Greece. And the governments actually committed themselves to do so at that time."

"Markets continue to trade on a weak note given lingering [US] fiscal cliff concerns and worries about whether Greece will get the funding it needs to meet debt payments" says Nick Verdi, Singapore-based currency strategist at Barclays.

Draghi also answered a series of questions on whether he would like to see Spain request a bailout by saying it is up to the Spanish government and not the ECB. The ECB's sovereign bond buying program, Outright Monetary Transactions, requires a government to have agreed to an adjustment program before the ECB will buy its bonds in the secondary market.

Benchmark yields on 10-Year Spanish government bonds touch a one-month high this morning, a day after Spain auctioned longer-term bonds for the first time in 18 months, according to newswire Reuters.

"The five-year sale was awful," said one trader, citing a wide discrepancy between the highest yield accepted for the bond and the average yield.

Spain has over €100 billion of debt due to mature next year.

The ECB voted to leave its key interest rate on hold at 0.75% Thursday.

"We have penciled in an interest-rate cut in December," says Howard Archer, economist at research firm IHS Global Insight.

The Euro fell to a one-month low against the Dollar Friday, while Euro gold prices traded within 2% of last month's all-time high.

Elsewhere in Europe, German inflation held steady at 2% last month, according to figures published this morning.

Over in China, industrial production grew by 9.6% in the year to October, official figures published Friday show, up on the previous month and a stronger acceleration that most analysts forecast.

Retails sales growth was also stronger-than-expect last month at 14.5% year-on-year – up from 14.2% in September.

"The domestic economy is evolving in a good direction," China's central bank governor Zhou Xiaochuan said Thursday, ahead of the release of the above data.

"The key question for investors," says Bank of America Merrill Lynch economist Lu Ting, "is whether China's economic growth has truly bottomed out. Based on October data… the answer is firmly yes."

China's consumer price index meantime shows inflation fell to 1.7% last month, down from 1.9% a month earlier.

"The October CPI confirms that inflation is currently not a main concern for the government," says Nomura analyst Zhang Zhiwei.

"Policy easing will likely continue in Q4 to support a growth recovery."

Chinese gold bullion demand is expected to hit 860 tonnes this year, a 1% increase on 2011, according to Philip Klapwijk, global head of metals analytics at consultancy Thomson Reuters GFMS.

"China will overtake India [this year]," Klapwijk told the online Reuters Global Gold Forum Thursday, "both in overall demand terms and as the world's largest jewelry market."

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