The tight race between President Barack Obama and Republican rival Mitt Romney has made for a high level of anxiety. Markets hate uncertainty, but the uncertainty about who will lead the country, and how, ends with Tuesday’s election. The election could be a turning point for markets and the economy.
In the politically packed days ahead, China’s ruling Communist party begins the 18th congress in its history on Thursday, and there is also a two-part parliamentary vote In Greece.
London Gold Market Report
from Ben Traynor
BullionVault
Monday 5 November 2012, 07:30 EST
SPOT MARKET gold bullion prices rallied above $1680 an ounce Monday morning in London, having earlier fallen to a nine-week low, while stock markets edged lower and US Treasury bonds gained, with one day to go before the US presidential election.
The US Dollar Index, which measures the Dollar’s strength against other major currencies, rose to a two-month high.
“Gold is still holding the long-term uptrend support at $1631,” says the latest technical analysis from bullion bank Scotiabank.
“There is also support at $1661.”
Silver bullion rallied back to $31 an ounce, while on the commodities markets, oil was broadly flat while copper prices edged lower.
Gold remains more than 2% off where it started the month, while silver is down more than 4%, after both metals fell sharply on Friday following the release of better-than-expected US nonfarm payroll data.
Bullion dealers in Asia meantime “are not in a rush to buy because there is plenty of supply around,” one Singapore-based trader told newswire Reuters this morning.
“But if prices drop below $1650, there will be good demand and supply will tighten up.”
This Sunday sees the festival of Dhanteras in India, followed by Diwali two days later, both traditionally associated with buying gold.
“The peak marriage season is immediately after Diwali,” says Mehul Choksi, chairman of Indian jewelry group Gitanjali.
“We expect sales to grow by 35-40% this Dhanteras.”
“If gold remains at the current price level,” adds Kumar Jain at Mumbai jewelers Umedmal Tilokchand Zaveri, “jewelry sales will definitely surge as people are also buying for the marriage season.”
In the US, the so-called speculative net long position of Comex gold futures and options traders – the difference between the numbers of bullish long and bearish short contracts held by traders classified as noncommercial – fell for the third week running in the week to last Tuesday, weekly figures published Friday by the Commodity Futures Trading Commission show.
“Given the excessive length of the past weeks and a rising uncertainty among investors over the ability of QE3 to support prices and/or the longevity of the Fed’s open-ended commitment to easing, the liquidations [of long positions] are unsurprising,” says Standard Bank commodities strategist Marc Ground.
“The market is considerably less strained than it was several weeks ago — net speculative length as a percentage of open interest has come off considerably…which could see some consolidation emerge.”
With one day left before the US election, opinion polls show Barack Obama and Mitt Romney are neck and neck.
“Obama is clearly ‘favored’ by the commodities markets,” says a note from Commerzbank, “mainly because of his support for Ben Bernanke and the ultra-expansionary monetary policy of the US Fed, [but] any ‘disappointment’ if Romney should come out on top is likely to be short-lived.”
“The financial markets might not like [an Obama win],” adds Steve Barrow, head of G10 research at Standard Bank.
“The Dollar could go down…[but] we don’t expect any weakness to last—at least not against the Euro. For here there’s something of a gap opening up between the US’s economic performance and that of the Eurozone.”
Greek prime minister Antonis Samaras has promised MPs that a fresh round of austerity measures would be “the final one”, ahead of a parliamentary vote on reforms this Wednesday. The result of the vote could influence whether or not Greece gets its next tranche of bailout money, worth €31 billion.
“The Greek risk could come to a head this week,” says Holger Schmieding, chief economist at Berenberg Bank.
“Greece matters as a trigger of potential contagion to the much bigger economies of Italy and Spain.”
The number of unemployed in Spain rose by 128,200 last month, official figures published this morning show, considerable more than expected.
Some European sovereigns could potentially reduce their borrowing costs by issuing bonds collateralized with gold bullion, CNBC reports, citing Tilburg University economist Sylvester Eijffinger.
Eijffinger is the latest economist to back such an idea, which has been proposed by the World Gold Council and which the subject of a draft paper published by the European Parliament in September.
Gold value calculator | 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. Ben writes and presents BullionVault’s weekly gold market summary on YouTube and can be found on Google+
(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.
By TraderVox.com
Tradervox.com (Dublin) – The sterling pound advanced against the euro for the second week as improvements in the UK economy dampened speculation of additional stimulus. The sterling pound remained low against the dollar, as reports last week showed that the US employers added more jobs last month than the market was expecting. The sterling’s strength against the euro came just days before the Bank of England Monetary Policy Committee meeting on November 7-8. The MPC will discuss whether to extend the asset-purchases program. It refrained from extending it in their last meeting last month.
According to Childe-Freeman, who heads foreign exchange strategy in London at Bank of Montreal, the recent news from UK has been supportive of the pound. He noted that the UK construction has particularly improved. He projected that the sterling will continue to rise against the pound as far the UK economy keeps providing positive news. He also suggested that there is decreased expectation of QE from the MPC when they meet this week. The UK currency has been supported by the expansion reported in the construction sector.
According to a report last week, the gauge of construction activity expanded to 50.9 in October, from the 49.5 registered in September. This was better than the median market estimate of 49. The UK economy came out of a recession in the third quarter when the GDP expanded by one percent. The positive reports from the UK were supported by the Confederation of British Industry report which forecast a growth of 1.4 percent in 2013. Following these reports, most economists and analysts have changed their previous bets of Bank of England adding stimulus.
The pound advanced against the euro by 0.2 percent to 799.91 pence at the start of trading in London from last week’s close of 80.12 pence per euro. It reached its strongest level since October 2 of 79.86 pence. The UK currency was little changed against the dollar, exchanging at $1.6006 down from last week’s close of $1.6031.
Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management.
Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
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By TraderVox.com
Tradervox.com (Dublin) – The 17-nation currency dropped against the greenback to almost eight-week low as concerns about Greece’s in ability to secure bailout funds rose in the market. This spurred fears of a possible Greek exit. The euro declined against major peers after Antonis Samaras, the Greek Prime Minister, indicated that the austerity measures proposed will be the last one. He said this as Greek parliament prepares to discuss the proposed spending cuts which include wage and pension cuts. The dollar Index continued with an upward trend as US prepares to vote tomorrow. The Australian dollar was up as retail sales reports showed a better-than-expected performance.
According to Imre Speizer, who is a strategist in Auckland at Westpac Banking Corp., there are increased concerns on the ability of Greece to secure extended bailout money as the governing coalition is seen to disagree more and more. Imre predicted the euro to continue dropping if the issues in Greece are not resolved. According to Samaras, the Greek Prime Minister, the Greek society will not be able to take any more spending cuts. In a speech to lawmakers of New Democracy Party, the Prime Minister indicated that the proposed measures are the last one the country will make. The latest package will be taken to parliament for the first vote on November 7.
Greece has been involved in discussions with troika, a group comprised of its international creditors, who have expressed their intention to keep Greece in euro region. The International Monetary Fund, European Central Bank and the European Union have been holding talks with Greece to come up with acceptable spending cuts for Greece to get bailout money. However, political leaders in Athens have continued to debate the terms of the latest package. The euro dropped by 0.4 percent against the dollar to trade at $1.2790 at the start of trading in London, after concerns rose of Greece position in euro area. The common currency fell by 0.5 percent to 102.73 yen.
Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management.
Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox
Source: ForexYard
The USD/JPY remained within reach of its highest point since late April during the overnight session, as positive US employment data continued to boost confidence in the American economic recovery. That being said, uncertainty regarding the outcome of tomorrow’s presidential election limited any gains.
The euro extended its bearish run throughout overnight and early morning trading, as concerns regarding Greece’s ability to secure another round of bailout funds have weighed down on the common currency. The EUR/USD, currently trading at 1.2790, is at its lowest point in close to two-months.
After a brief upward correction during the Asian session, gold once again began falling and is now trading around the $1677 an ounce level, its lowest point since early September.
Main News for Today
UK Services PMI- 09:30 GMT
• The indicator is forecasted to come in at 52.0, slightly below last month’s figure of 52.2
• Any worse than expected news could push the GBP/USD, already close to a two-week low, lower during mid-day trading
US ISM Non-Manufacturing PMI- 15:00 GMT
• The indicator is forecasted to come in at 54.6, slightly below last month’s figure of 55.1
• Should the indicator come in above the expected level, the dollar could extend its recent bullish trend against the euro, JPY and CHF
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.
Remember, remember the Fifth of November,
The Gunpowder Treason and Plot,
I know of no reason
Why the Gunpowder Treason
Should ever be forgot.
Guy Fawkes, Guy Fawkes, ’twas his intent
To blow up the King and Parli’ment.
Three-score barrels of powder below
To prove old England’s overthrow;
By God’s mercy he was catch’d
With a dark lantern and burning match.
Hulloa boys, Hulloa boys, let the bells ring.
Hulloa boys, hulloa boys, God save the King!
–Traditional English nursery rhyme
November 5 is Guy Fawkes Day, the day that the English remember one of their most notorious villains or one of their most celebrated heroes, depending on their mood.
On this day in 1605 Fawkes, a disgruntled English Catholic rebel, attempted to take down the entire English government—king, ministers, parliament and all—by blowing up the House of Lords during the State Opening of Parliament.
Fawkes was discovered and promptly executed, but he is remembered—in typically dry English humor—as the last man to enter parliament with honest intentions.
As we approach a U.S. presidential election with two very unappealing candidates, pour yourself a drink and offer a toast across the Atlantic.
The post Happy Guy Fawkes Day appeared first on Sizemore Insights.
No related posts.
By Central Bank News
The average rate rise by the 10 central banks that raised rates through October was 14.25 percentage points but that figure was skewed by Malawi’s 800 basis points hike. Excluding Malawi, rates were increased by 70 basis points, with 25 basis points the most common rise.
| COUNTRY | YTD | COUNTRY | YTD | COUNTRY | YTD | ||
| UGANDA | -1,000 | LATVIA | -100 | NAMIBIA | -50 | ||
| VIETNAM | -500 | MONGOLIA | -100 | SOUTH AFRICA | -50 | ||
| MOZAMBIQUE | -450 | PHILIPPINES | -100 | SOUTH KOREA | -50 | ||
| MOLDOVA | -400 | ALBANIA | -75 | SWEDEN | -50 | ||
| BRAZIL | -375 | GEORGIA | -75 | NORWAY | -49 | ||
| TAJIKISTAN | -330 | HUNGARY | -75 | ANGOLA | -25 | ||
| KENYA | -300 | ISRAEL | -75 | EURO AREA | -25 | ||
| PAKISTAN | -250 | KUWAIT | -75 | INDONESIA | -25 | ||
| GAMBIA | -200 | ROMANIA | -75 | MACEDONIA | -25 | ||
| KAZAKHSTAN | -200 | CZECH REPUBLIC | -70 | MOROCCO | -25 | ||
| DOMINICAN REP. | -175 | CHINA | -56 | THAILAND | -25 | ||
| CAPE VERDE | -150 | DENMARK | -50 | T & T | -25 | ||
| AUSTRALIA | -100 | INDIA | -50 | W. AFRICAN STS. | -25 | ||
| MAURITIUS | -50 | BULGARIA | -19 | ||||
By Central Bank News
Here’s today’s Central Bank News link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don’t miss any important news.
Numbers don’t lie. Until an economist gets their hands on them. Then they sing any story you want them to. Here’s the latest story they’ll have you believe, from the Age:
‘Far from being squeezed, working Australians are better off than ever, the latest figures show, with lower costs from interest rates counteracting the higher costs imposed by the carbon tax.’
We’d wager that your latest figures matter more to you than economists‘. And you know whether you’re being squeezed or not better than they do. The sad thing is, it’s the people who can’t fight back that are paying for ‘working Australians’ being better off…
The Age article continues:
‘The stunningly low cost-of-living increase – half the official inflation rate – is because the Bureau of Statistics’ cost-of-living measure incorporates household mortgage interest costs, which have slid 6.7 per cent over the year to September and 2.5 per cent in the past three months. It also gives a high weight to motoring costs, which have slid 0.8 per cent in the past three months as a result of lower petrol prices.
‘[…] households for which mortgage charges and petrol prices are less important were harder hit. The Bureau of Statistics says the living costs faced by pensioners and households relying on Newstart climbed 2 per cent. The costs faced by self-funded retirees climbed 1.5 per cent.’
If you’ve given up work and rely on savings, falling interest rates are a big problem. It’s probably not the best idea to go into debt or buy a gas guzzler so that you can be in the ‘far from being squeezed’ group.
What about the retirement investments that these people made to provision for their future? How are they faring?
The Age reported that ‘finally, [super fund] contributors are back to the balances they held before the financial crisis.’ Whoopdeedoo.
If you’ve been reading Money Morning for a while, you’ll know we blame the central bankers for the boom and bust of the stock market. Not only are central bankers reducing income for savers, they’re playing yoyo with your shares.
By the way, the same Age article also helpfully points out that you would have been better off with a term deposit than a balanced super fund over the last 10 years. Well, it doesn’t admit that directly, but a 6.3% a year average return for the median super fund is about what you could have gotten from term deposits. Minus the worry.
If all this seems like pointless number fiddling, you’re onto something. After tax and inflation, are you really achieving much with any of these investments?
Just like anything in life, you don’t get paid for doing nothing. It just doesn’t make sense. There is one exception though. You can get paid for doing nothing if you own something that does the work for you. And pays you the income it earns.
We’ll be releasing a report on how you can build up a sizeable income for your retirement soon. In the meantime, there is another way you can go about this. One that allows you to stop caring about reports like the two from the Age we just told you about. One that puts you outside their system of measurement.
In what might be our favourite Daily Reckoning article yet, Bill Bonner outlines how to live a life that gives economists nightmares and yourself a good night’s sleep…
Nick Hubble
Editor, Money Morning
From the Port Phillip Publishing Library
Special Report: After the Bust
Daily Reckoning:
A Deflationary Conclusion to China’s Bubble
Money Morning:
How the Aussie Dollar is Caught in a Worldwide Game of Currency Chess
Pursuit of Happiness:
Political Parasites Never Die
We’ve been meaning to tell you why economists and policy makers were jackasses. We can’t remember what we intended, but this blank is easy to fill in.
Let’s begin by looking at an economic disaster area: Greece. It has a per-capita GDP of about $29,000 compared to nearly twice as much for the US. One out of four Greeks is unemployed. Half of young people are jobless. And the country is broke. Only the kindness of strangers in France and Germany keeps the lights on.
An economist would use a technical term to describe it – “basket case”.
But let’s look more specifically at a Greek… let’s look at Mr Stamatis Moraitis. Recently, he was the subject of an article in the New York Times. A remarkable man, he was diagnosed with terminal lung cancer in 1976.
Given nine months to live, he decided to economise on his own funeral. In the US he figured it would cost $2,000 to put him in the ground. In his native Greece, on the other hand, he could be planted for less than $200.
This seemed like such a good deal, Mr Moraitis couldn’t afford not to take advantage of it. But as it turned out, his penny pinching seems to have saved his life. 36 years later, he’s still alive.
Yes, the Greek beat cancer. The poor grave diggers got no tip. The undertaker delivered no bill. The children got no inheritance. There being no deceased, his house was not put on the market; so, no sales commission was earned… no remodelling was done… no new kitchen was ordered… and no moving company was engaged.
In short, Mr Moraitis cheated the economy out of a boost. Not only that, but reading further, we discover that Mr Moraitis lives on a poor island, Ikaria. Not only that, he seems to have disappointed economists at every turn. He didn’t build a new house; he moved into a small, cheap, old house with his parents. No new furniture. No new appliances. No new granite countertops.
The man is practically an anti-consumer. He makes his own wine and tends his own garden. No wonder the Greek economy is so weak!
Despite having terminal cancer, he sought no medical treatment. No chemotherapy. No radiation. No drugs. In short, he threw no bones to the housing industry. None to the health industry. None to Home Depot. Nor to Best Buys. Nor any other buys.
Pity the poor islanders. Ikaria is a small place, with just 10,000 Greeks. A bum economy. And nothing to do. No malls to go to. Few jobs; unemployment on Ikaria is about 40%. Want a fancy restaurant? Forget it. Want a fast car? Nowhere to go with it on the island.
So, what do residents do? Well, they tend their gardens. They drink a lot of wine. They visit with each other… often until late at night.
The New York Times:
‘… their daily routine unfolded…wake naturally, work in the garden, have a late lunch, take a nap. At sunset, they either visited neighbors or neighbors visited them. Their diet was also typical: a breakfast of goat’s milk, wine, sage tea or coffee, honey and bread.
‘Lunch was almost always beans (lentils, garbanzos), potatoes, greens (fennel, dandelion or a spinach like green called horta) and whatever seasonal vegetables their garden produced; dinner was bread and goat’s milk. At Christmas and Easter, they would slaughter the family pig and enjoy small portions of larded pork for the next several months.
‘Local women gathered in the dining room at midmorning to gossip over tea. Late at night, after the dinner rush, tables were pushed aside and the dining room became a dance floor, with people locking arms and kick-dancing to Greek music.’
They spend their days in the sun and their nights in merriment. They beat cancer. And they seem to live a long time; Ikaria has one of the highest concentrations of 100-year-olds in the world.
But their economy is not growing.
Poor bastards.
Bill Bonner
Contributing Writer, Money Morning
Publisher’s Note: This article originally appeared in The Daily Reckoning Australia
From the Archives…
More Bad News for the Asian Century
2-11-2012 – Kris Sayce
Is the Asian Century Already Kaput?
1-11-2012 – Kris Sayce
Has the Australian Dollar’s Luck Just Run Out?
31-10-2012 – Murray Dawes
How the Aussie Dollar is Caught Up in Big Bankers’ Games
30-10-2012 – Callum Newman
Does Excessive Government Spending Make You the World’s Best Treasurer?
29-10-2012 – Kris Sayce
