Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
9.WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING MARKET - Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
AI Tech Stock PORTFOLIO NAME OF THE GAME - 29th June 22
Rebounding Crude Oil Gets Far Away from the Bearish Side - 29th June 22
UK House Prices - Lets Get Jiggy With UK INTEREST RATES - 28th June 22
GOLD STOCKS ARE WORSE THAN GOLD - 28th June 22
This “Bizarre” Chart is Wrecking the Stock Market - 28th June 22
Recession Question Answered - 28th June 22
Technical Analysis: Why You Should Expect a Popularity Surge - 28th June 22
Have US Bonds Bottomed? - 27th June 22
Gold Junior Miners: A Bearish Push Is Coming to Move Them Lower - 27th June 22
Stock Market Watching Out - 27th June 22
The NEXT BIG EMPIRE WILL BE..... CANZUK - 25th June 22
Who (or What) Is Really in Charge of Bitcoin's Price Swings? - 25th June 22
Crude Oil Price Forecast - Trend Breaks Downward – Rejecting The $120 Level - 25th June 22
Everyone and their Grandma is Expecting a Big Stocks Bear Market Rally - 23rd June 22
The Fed’s Hawkish Bite Left Its Mark on the S&P 500 Stocks - 23rd June 22
No Dodging the Stock Market Bullet - 23rd June 22
How To Set Up A Business To Better Manage In The Free Market - 23rd June 22
Why Are Precious Metals Considered A Good Investment? Find Out Here - 23rd June 22
UK House Prices and the Inflation Mega-trend - 22nd June 22
Sportsbook Betting Reviews: How to Choose a Sportsbook- 22nd June 22
Looking to buy Cannabis Stocks? - 22nd June 22
UK House Prices Momentum Forecast - 21st June 22
The Fed is Incompetent - Beware the Dancing Market Puppet - 21st June 22
US Economy Headed for a Hard Landing - 21st June 22
How to Invest in EU - New Opportunities Uncovered - 21st June 22
How To Protect Your Assets During Inflation - 21st June 22
AI Tech Stocks Current State, Is AMAZON a Dying Tech Giant? - 20th June 22
Gold/Gold miners fundamental checkup - 20th June 22
Personal Finance Tips: How To Get Out Of A Tough Financial Situation - 20th June 22
UK House Prices Relative to GDP Growth - 19th June 22
Will Global Markets Be Pushed Deeper Into Crisis Event By The US Fed? - 19th June 22
Useful Things You Need To Know About Tweezer Top Candlestick Pattern - 19th June 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold "Better Sentiment" Seen as Gold-Platinum Premium Sets New High

Commodities / Gold and Silver 2012 Aug 13, 2012 - 06:52 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleU.S. DOLLAR gold bullion prices rose to $1625 an ounce during Monday morning's London trading, towards the higher end of gold's range over the last three months.

Silver bullion climbed to $28.18 an ounce – in line with last week's close, after briefly dipping below $28.

Stock markets were broadly flat following news that Japan's economic growth slowed sharply in the second quarter.


The cost of an ounce of gold bullion minus that of an ounce of platinum meantime breached $230 an ounce Monday, a new record high for the gold-platinum premium.

"Sentiment [towards gold] has gotten better in the past few days with investors focusing on central banks," says Dominic Schnider at UBS Wealth Management in Singapore.

On the currency markets, the Euro rallied above $1.23 Monday morning, pushing Euro gold prices down to more-or-less where they started the day, around €42,400 per kilo (€1318 per ounce).

"Speculation that the [European Central Bank] might take some concrete measures is making it a little hard for the market to sell [the Euro] too aggressively," one Tokyo-based trader tells newswire Reuters.

ECB president Mario Draghi said last month that the central bank is ready to do "whatever it takes to preserve the Euro", comments which have been interpreted by many as a hint that it might intervene in markets to support government bond prices and thus prevent borrowing costs rising too high.

Draghi subsequently added that governments would first have to approach Europe's bailout funds, the European Financial Stability Facility and its successor the European Stability Mechanism, for assistance, describing this as a "necessary...but not sufficient" condition of ECB action. Germany's government however will not be in a position to ratify the €500 billion ESM unless this is approved by the German Constitutional Court, which is due to rule next month.

Some European leaders have expressed skepticism over the effectiveness of ECB bond buying.
"We haven't forgotten what happened in August of last year," said ECB Governing Council member and Belgian central bank governor Luc Coene in newspaper interviews published Saturday.

"We bought Italian bonds and right after that the Italian government reneged on its pledges...the conclusion is clear: When you take away the market pressure, you take away the pressure on politicians to act."

"We've got a critical view on [ECB bond buying]," added Finnish prime minister Jyrki Katainen in an interview with Germany's Der Spiegel on Sunday.

"The European Central Bank purchased sovereign bonds on the secondary market, and it only helped temporarily."

Yields on 3-Year German bunds ticked back above 0% Monday, having fallen into negative territory again last week. Yields on 2-Year bunds remained less than zero this morning.

"I'm skeptical of investing in zero-yielding paper," says Johannes Jooste, senior strategist at Merrill Lynch Wealth Management in London.

"I'm not convinced the current yields are justified...the risk that Germany will have to issue more debt to finance the bailout [of struggling Euro members] is real."

Over in the US, the Federal Reserve should begin a third round of quantitative easing, according to Federal Reserve Bank of San Francisco president John Williams.

"[The economy is] at the point where it is definitely tilting toward taking further action," Williams said in an interview published by the San Francisco Chronicle Friday.

In New York, the difference between bullish and bearish contracts held by gold futures and options traders on the Comex – known as the speculative net long – fell by 7.6% in the week to last Tuesday, the day of the week for which the Commodity Futures Trading Commission publishes such data.

By the end of Friday however, open interest in gold futures had ticked higher, gaining 2.3% on Tuesday's volume.

The world's biggest gold ETF, the SPDT Gold Shares (GLD), added 3.2 tonnes of gold bullion to its holdings over the course of last week, taking the total to 1258.1 tonnes.

By contrast, the world's largest Silver ETF, the iShares Silver Trust (SLV), saw its holdings fall 16.6 tonnes to 9742.4 tonnes.

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.


© 2005-2019 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