Most Popular
1. Dow Max Drawdown Bear Stock Market 2022 - Accumulating Deviations from the Highs - 21st Feb 22
2.Putin Starts WW3 in Ukraine, Will Use Tactical Nuclear Weapons, China Prepares Taiwan Blitzkrieg - 28th Feb 22
3.World War 3 Phase 1 - Putin WINS Ukraine War! - 25th Feb 22
4.INVESTORS SEDUCED by CNBC and the STOCK CHARTS COMPLETELY MISS the BIG PICTURE! - 10th Feb 22
5.Will There Be A 2024 US Presidential Election? - 3rd Mar 22
6.Gold and SIlver, Precious Metals Sector Is at a Terrific Buy Spot - 6th Feb 22
7.Why Putin Wants the WHOLE of Ukraine - World War 3 Untended Consequences - 6th Feb 22
8.Dow Stock Market Expected Max Drawdown 2022 - 19th Feb 22
9.Stock Market Calm In the Eye of the Inflation Storm - 4th Mar 22
10.M = F - Everything is Waving! Stock Market Forward Guidance - 7th Mar 22
Last 7 days
Britain's Hyper Housing Market - 27th May 22
Lower Copper price due to Chinese lockdowns is only Temporary - 27th May 22
How the United States Conquered Inflation Following the Civil War - 27th May 22
Greater Depression Now!? - 27th May 22
Stocks: Is the Really Scary Part Just Ahead? - 27th May 22
The Dark Side of the Internet - Cybersecurity - 27th May 22
Why Ray Dalio is WRONG About China - Principles for Dealing with the Changing World Order - 24th May 22
Globalists Convene to Plan Central Bank Digital Currencies - 24th May 22
After Recent Highs, What’s Next for the Gold Junior Miners? - 24th May 22
Why APPLE Could CRASH the Stock Market! - 21st May 22
Why Is Crude Oil Ignoring US Inventories? - 21st May 22
Here is Why I’m Still Bullish on Gold Mining Stocks - 21st May 22
THE INFLATION MEGA-TREND QE4EVER! - 20th May 22
US Real Estate Investors – Is There An End In Sight? - 20th May 22
How Technology Affected the Gaming Industry - 20th May 22
How To Set And Achieve Reasonable Goals For Your Company - 20th May 22
How Low Could the Amazon (AMZN) Stock Price Fall? - 19th May 22
Bitten by FANG? Clocked by Cryptos? -- 'Air Pockets' Everywhere - 19th May 22
Northern General Hospital Orthopedics Fractures and and Ankle Clinic Consultations Real Patient Experience - 19th May 22
Cathie Wood Goes All in on Teladoc, ARKK INSANE Noob Investing Strategy! - 17th May 22
This is Anything but Positive for US Housing Market - 17th May 22
What Should We Do If There Is No Fed Monetary Policy Pivot? - 17th May 22
All Possible Ways to Earn Free Litecoin - 17th May 22
How low Could the Amazon Stock Price Fall? - 16th May 22
Cathy Wood ARKK INSANITY There is NO Coming Back! - 16th May 22
NASDAQ 100 Stock Market LOWER LOWS & LOWER HIGH - 16th May 22
Sanctions, trade wars worsen US inflation - 16th May 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Are Investors Still Bullish on Gold?

Commodities / Gold and Silver 2012 Mar 13, 2012 - 04:23 AM GMT

By: Eric_McWhinnie

Commodities

According to Bloomberg, hedge funds decreased bets on higher commodity prices for the first time in seven weeks. This comes shortly after China cut its official economic growth forecast to 7.5 percent this year, the lowest since 2004. While money managers slashed bets on copper by the most in two months, demand for precious metals remains strong.


Data from EPFR Global, which provides fund flows and asset allocation data to financial institutions around the world, shows that investors placed more than $200 million into commodities in the week ending March 7. However, investors placed $404 million into gold and precious metals funds. Bloomberg explains, “Investors in gold-backed exchange-traded products added to holdings for a seventh consecutive week, taking the total to a record 2,408.4 metric tons valued at $132.7 billion.” Even though nations such as China are trying to tame inflation and stimulus expectations, investors continue to seek wealth preservation in gold and silver as nations continue to engage in currency wars.

Last week, Brazil’s central bank cut interest rates for the fifth consecutive time by reducing the benchmark Selic 75 basis points to 9.75 percent. The prior rate cuts had been by 50 basis points. Brazil President Dilma Rousseff said, “The reduction of interest rates by the Central Bank isn’t just to heat up the Brazilian economy. I compliment the central bank because the broader intention is to align the internal rate with the international rate.” She goes on to criticize the low rates and easy money seen in developed economies and says there’s a “huge bubble on the way.”

Although the European Central Bank did not cut rates last week, investors are focused on the bank’s exploding balance sheet. Due to the European banks craving capital, the ECB pumped one trillion euros into the banks via cheap three-year loans, known as the long-term refinancing operation. Now, the can has been kicked once again down the long and bumpy road of unsustainable debt. The ECB’s balance sheet now exceeds three trillion euros and equals one-third of euro zone GDP. Meanwhile, the Federal Reserve’s balance sheet represents about 20 percent of the GDP in the United States.

On Tuesday, the Federal Reserve’s policy-making committee will meet, but the outcome is unlikely to produce more stimulus measures. Fed Chairman Ben Bernanke is more likely to discuss the current Operation Twist program and positive signs in the labor market. Thus, gold and silver may be see more weakness in the short-term. Currently, both metals are near key support levels. However, with countries around the world competing to devalue currencies against each other, the longer-term picture in gold and silver remains bullish.

For more analysis on our support levels and ranges for gold and silver, consider a free 14-day trial to our acclaimed Gold & Silver Investment Newsletter.

By Eric_McWhinnie

http://wallstcheatsheet.com

Wall St. Cheat Sheet : Only days after the S&P 500 crashed to the depths of hell at 666, the Hoffman brothers launched Wall St. Cheat Sheet: one of the fastest growing financial media sites on the web. Like a samurai, our mission is to cut through the bull and bear shit with extraordinary insights, a fresh voice, and razor-sharp wit. We provide the highest quality education and information for active investors, financial professionals, and entrepreneurs.

© 2012 Copyright Eric McWhinnie - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 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