{"id":37297,"date":"2013-04-04T09:10:29","date_gmt":"2013-04-04T13:10:29","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=37297"},"modified":"2013-04-04T09:10:29","modified_gmt":"2013-04-04T13:10:29","slug":"stop-losses-big-fund-sales-seen-behind-sharp-gold-drop-as-japan-begins-1-4-trillion-of-new-qe","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/04\/04\/stop-losses-big-fund-sales-seen-behind-sharp-gold-drop-as-japan-begins-1-4-trillion-of-new-qe\/","title":{"rendered":"Stop-Losses & Big Fund Sales Seen Behind Sharp Gold Drop as Japan Begins $1.4 Trillion of New QE"},"content":{"rendered":"

London Gold Market Report<\/strong>
\nfrom Adrian Ash<\/strong>
\nBullionVault<\/strong><\/a>
\nThurs 4 Apr, 08:50 EST<\/strong><\/p>\n

The PRICE of GOLD extended its worst two-day drop vs. the Dollar since June last year
\nThursday morning in London, falling as low as $1540.50 per ounce before rallying to $1551.<\/p>\n

Commodities also stemmed their fall and major government bonds trimmed earlier gains.<\/p>\n

European stock markets were mixed, but Japanese shares leapt 2.2% on the day after the
\ncentral bank in Tokyo vowed “to use every means available” to reverse the country’s two-
\ndecade economic depression and price deflation.<\/p>\n

Spending more than $1.4 trillion in newly-created money over the next 2 years, the Bank of
\nJapan’s fresh quantitative easing will see it buy listed equities and real-estate trust funds as
\nwell Japanese government bonds.<\/p>\n

On the news the Yen fell nearly 3% versus the Dollar. That only unwound the last 36 hours
\nof falling gold prices, however, which rose back to \u00a54750 per gram \u2013 a new three-decade
\nhigh when first hit at the start of this year.<\/p>\n

“Stop loss orders were triggered [Wednesday] when the gold price fell through key support
\nlevels,” says a note from German bank and bullion retailer Commerzbank.<\/p>\n

“We believe the next wave will be another corrective wave [with] a target as low as $1308,”
\nsays Russell Browne at bullion-bank Scotia Mocatta, pointing to Elliott Wave analysis.<\/p>\n

“However, gold has to first break through big support level in $1522 to $1535 level, the lows
\nfrom 2011 and 2012.”<\/p>\n

“We have to think that the gold sell likely has some roots in heavy fund liquidation,” says
\ncomment from brokers INTL FCStone, adding “Our guess is that the lone holdout \u2013 John
\nPaulson \u2013 may finally be throwing in the towel and perhaps paring some of his massive
\npositions.”<\/p>\n

The giant US-listed SPDR Gold Trust ETF shed a further 2.7 tonnes on Wednesday after
\nlosing more than 8 tonnes Tuesday according to Reuters data.<\/p>\n

Now holding 1206 tonnes of gold bullion to back its shares \u2013 more than 10% less than the all-
\ntime peak of late-November last year \u2013 the trust was 5% owned by Paulson & Co. as part of
\nits flagship, gold-denominated hedge funds.<\/p>\n

The quantity of bullion held for silver ETF trust funds was unchanged Wednesday according
\nto Bloomberg. But silver prices also extended their drop for the week to 5.6% on Thursday
\nmorning with a new 8-month low versus the Dollar beneath $26.80 per ounce.<\/p>\n

“Silver broke the four-year trend line now at $29.80 and corrected lower,” says a note from
\nbullion market-making bank Societe Generale, “and is nearing the multi-year lows at 26.40\/
\n26.05.<\/p>\n

“This zone is made up of the lows since 2011.”<\/p>\n

SocGen earlier this week issued a report declaring “the end of the gold era” for the last
\ndecade’s bull market, citing expectations of higher interest rates from the US Federal Reserve.<\/p>\n

“Things still have a way to go before we can say we’ve fully recovered from the worst
\nfinancial crisis and recession since the 1930s,” John C.Williams of the San Fran Fed told an
\naudience in Los Angeles on Wednesday.<\/p>\n

A day after Dennis Lockhart, president of the Atlanta Federal Reserve Bank, said the US
\nFed’s $40 billion per month asset purchases “continue to be justified”, Williams said he
\nexpects the unemployment rate “to edge down to a little below 7% by late 2014 and fall
\nbelow 6.5% in the middle of 2015.”<\/p>\n

Six-point-five is the jobless level at which the Fed would consider tightening its ultra-
\naccommodative policies, according to its recent policy statements. Williams is not a voting
\nmember of the Fed’s main committee until 2015.<\/p>\n

Today both the Bank of England and the European Central Bank meantime kept their key
\ninterest rates on hold yet again, offering overnight money to commercial banks at a record-
\nlow 0.50% and 0.75% respectively.<\/p>\n

The gold price in Euros today hit its lowest level in four weeks at \u20ac1200 per ounce \u2013 a record
\nhigh when first reached on the way up in August 2011.<\/p>\n

UK savers and investors saw gold priced in Sterling make a new 2013 low at \u00a31020 per
\nounce.<\/p>\n

Adrian Ash<\/strong><\/span><\/a>
\nBullionVault<\/strong><\/span><\/a><\/p>\n

Gold price chart, no delay | Buy gold online<\/strong><\/span><\/a><\/p>\n

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market
\nfor private investors online, where you can buy gold and silver in Zurich, Switzerland for just
\n0.5% commission.<\/p>\n

(c) BullionVault 2013<\/p>\n

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best
\nplace for your money, and any decision you make will put your money at risk. Information
\nor data included here may have already been overtaken by events \u2013 and must be verified
\nelsewhere \u2013 should you choose to act on it.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

London Gold Market Report from Adrian Ash BullionVault Thurs 4 Apr, 08:50 EST The PRICE of GOLD extended its worst two-day drop vs. the Dollar since June last year Thursday morning in London, falling as low as $1540.50 per ounce before rallying to $1551. Commodities also stemmed their fall and major government bonds trimmed earlier … <\/p>\n

Continue reading “Stop-Losses & Big Fund Sales Seen Behind Sharp Gold Drop as Japan Begins $1.4 Trillion of New QE”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-37297","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/37297","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=37297"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/37297\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=37297"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=37297"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=37297"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}