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
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
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 $1795, Useless Eurozone Leaders would Cut Funding to Govts Disobeying Brussels 

Commodities / Gold and Silver 2011 Aug 17, 2011 - 12:11 PM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleTHE DOLLAR gold price rose to a high of $1795 an ounce Wednesday morning in London – 1.1% off last Wednesday's record – before selling off towards lunchtime.

Broad commodity prices rose, while stock markets dropped following Tuesday's Franco-German summit in Paris.


"Downside support [for the gold price] is found at $1742," say technical analysts at bullion bank Scotia Mocatta.

"Our big picture view is that while $1687 holds, the risk is for a measured move objective of $1932."

Silver prices broke the $40 per ounce mark around lunchtime, hitting $40.38 – a 3.4% gain for the week so far.

"Gold is still the most appealing asset in the short run, while uncertainty over the Eurozone's future will not evaporate overnight," says VTB Capital analyst Andrey Kryuchenkov.

Eurozone governments will not start issuing so-called Eurobonds – join-government debt instruments collectively back by all members of the single currency. Nor will the European Financial Stability Facility – the Eurozone's €440 billion bailout fund – be enlarged.

Those were the conclusions of Tuesday's meeting between French president Nicolas Sarkozy and German Chancellor Angela Merkel.

"Eurobonds can be imagined one day," Sarkozy told reporters after the meeting.

"But at the end of the European integration process, not at the beginning."

Merkel described Eurobonds as "last resort" that are not required at this point.

The two leaders instead advocated closer integration of Eurozone members' fiscal policies – with sanctions for those that breached rules on deficits and debt limits – and proposed an 'economic government' for the single currency area headed by current European Union president Herman van Rompuy.

In a joint letter to Van Rompuy Wednesday morning, Merkel and Sarkozy suggested a freeze on EU structural funding – intended to grant financial assistance and resolve economic and social problems – for members who fail to comply with Brussels recommendations on deficit reduction.

Currently 14 of the 17 Eurozone countries – including France and Germany – are subject to the European Commission's "excessive deficit procedure". EDP is triggered when a deficit exceeds 3% of gross domestic product, or when total government debt breaches 60% of GDP.

Merkel and Sarkozy also proposed a levy on financial transactions – known as a Tobin tax.
"Again, European leaders fail to provide a proper answer to the right question," says a note from French investment bank Natixis.

"A European Tobin-like tax is not the solution."

"The market felt [the meeting] to be useless [which] brought gold higher," said Swiss gold bullion refiner MKS on Tuesday.

Since the first Greek bailout in May 2010, the Euro gold price – which hit a high of €1248 per ounce this morning – is up more than 30%.

On the currency markets, the Swiss Franc shot up 2.6% against the Euro on Wednesday morning, prompting the Swiss National Bank to repeat its assertion that the Franc is "massively overvalued".

The SNB announced that it is expanding liquidity supply for the second time in a week. The central bank aims to increase banks' instant access deposits with the SNB by 67% to SFr200 billion.

"The SNB reiterates that it will, if necessary, take further measures against the strength of the Swiss Franc," said an official press release.

The currency's rise this morning saw the Swiss Franc gold price fall 2.3% to SFr1400 per ounce.

The Bank of England meantime refrained from expanding its asset purchase program – known as quantitative easing – at its nine-member Monetary Policy Committee meeting earlier this month, with only one of the nine members voting for expansion, minutes published Wednesday reveal.

Other members, however, "considered whether there was a case for increasing the degree of monetary stimulus by undertaking a further programme of asset purchases. Those members concluded that the case was not yet strong enough... further asset purchases might nonetheless become warranted were some of the downside risks to materialise."

The MPC voted unanimously to keep rates on hold at 0.5% – where they have remained since March 2009. At every other MPC meeting this year, at least two members have voted for a rate hike.

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 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.


© 2005-2022 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