{"id":39947,"date":"2013-07-11T09:47:59","date_gmt":"2013-07-11T13:47:59","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=39947"},"modified":"2013-07-11T09:47:59","modified_gmt":"2013-07-11T13:47:59","slug":"traders-urged-to-buy-dips-as-gold-eases-back-from-4-bernanke-jump","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/07\/11\/traders-urged-to-buy-dips-as-gold-eases-back-from-4-bernanke-jump\/","title":{"rendered":"Traders Urged to ‘Buy Dips’ as Gold Eases Back from 4% Bernanke Jump"},"content":{"rendered":"

London Gold Market Report<\/strong>
\nfrom Adrian Ash<\/strong>
\nBullionVault<\/a><\/strong>
\nThursday, 11 July 08:50 EST<\/strong><\/p>\n

WHOLESALE\u00a0prices for gold retreated from an overnight surge to nearly $1300 per ounce in London trade Thursday morning, while world stock markets ticked higher with major government bonds and commodities.<\/p>\n

Gold’s earlier 4.0% jump came after Federal Reserve chairman Ben Bernanke confirmed that the US central bank will maintain its “highly accommodative monetary policy<\/a>\u00a0for the foreseeable future [because it] is what’s needed.”<\/p>\n

\u00a0Trading more than $100 above late June’s three-year low of $1181 per ounce Thursday morning, gold in large wholesale bullion bars recorded its best\u00a0London Fix<\/a>\u00a0in two weeks.<\/p>\n

\u00a0After falling sharply on previous talk of ending quantitative easing by mid-2014 and perhaps then raising rates from zero, “The strong reaction of the precious metal markets,” says Germany’s Commerzbank in a note today, “is [because] investors believe that the Fed’s actions and attitude do not differ significantly from those of the ECB or BoJ.”<\/p>\n

\u00a0The European Central Bank last week suggested it may soon cut Eurozone interest rates from the current 0.5%.<\/p>\n

\u00a0The Bank of Japan today kept its monetary policy unchanged, holding interest rates at 0.1% and continuing with more than $700 billion per year of new quantitative easing.<\/p>\n

\u00a0“For the mid to longer term,” says David Govett at brokers Marex Spectron, “look to buy dips.<\/p>\n

“Over the course of the next six months, gold will grind higher…On the whole, I favour the upside longer term.”<\/p>\n

\u00a0Amidst\u00a0gold bullion<\/a>‘s record quarterly price drop this spring, “Recent recoveries consisted of upward moves of $150 and $80 respectively,” says another precious metals analyst, pointing to a top of $1320 for the current run “should it approximate what we saw in May.”<\/p>\n

\u00a0“I suspect a test of $1300 will be on the cards,” says MKS Capital’s chief trader Alex Thorndike, because “order books are very light up to that point.<\/p>\n

\u00a0“I have heard some chunky [mining] producer offers sit above this level, and there are good sell orders in the $1300-10 region.”<\/p>\n

\u00a0UK investors wanting to buy gold bullion bars<\/a> today saw the price reach a 3-week high above \u00a3857 per ounce.<\/p>\n

\u00a0Silver prices meantime eased back 1.0% after hitting a 3-week high of $20.29 per ounce.<\/p>\n

\u00a0The Euro currency also cut its earlier gains vs. the Dollar, as fresh political wrangling was blamed for a drop in Portuguese stock and bond prices.<\/p>\n

\u00a0Meantime in India, the world’s No.1 gold consumer market, “We will not promote the sale of coins and gold bars till [the country’s current account deficit] issue is resolved,” the\u00a0Times of India\u00a0quotes Sanjeev Agarwal, CEO of major retail chain Gitanjali, today.<\/p>\n

\u00a0Sixty-five per cent of India’s gold retailers have agreed to suspend sales of gold bars and coins for 6 months, the All India Gems & Jewellery Trade Federation said Wednesday, to help the government reduce imports and so cut India’s large gap between cash inflows and outgoings.<\/p>\n

\u00a0Analysis by Barclays Capital says June saw the heaviest outflow on record of money from Indian bonds and equity holdings.<\/p>\n

\u00a0Whilst India “remains vulnerable” to more outflows of foreign money, “For those concerned that the central bank will be forced to sell [some of its] gold,” says the Sober Look blog, “at this stage there are a number of other alternatives.”<\/p>\n

\u00a0India grew its reserves of gold bullion bars by nearly 60% in 2009,\u00a0buying 200 tonnes from the International Monetary Fund<\/a>\u00a0at a price of $1045 per ounce.<\/p>\n

\u00a0“Given the nation’s cultural attitude toward gold,” says Sober Look, “[selling reserves is]\u00a0politically just not an option<\/a>.”<\/p>\n

\u00a0For the retailers’ gold bullion suspension, “If we don’t follow through,” says Vikas Chudasama, director general of the All India Gems & Jewellery Trade Federation, “there may be a situation when\u00a0jewelers don’t have any gold to sell<\/a>.<\/p>\n

\u00a0“The government and the Reserve Bank of India have already restricted gold imports.”<\/p>\n

\u00a0The Times of India\u00a0notes that over the last 10 years, gold jewelry demand has remained constant, but\u00a0investment demand has risen 150%<\/a>\u00a0since 2009.<\/p>\n

\u00a0The ban will run beyond India’s peak gold-buying festival season of Diwali and Dhanteras.<\/p>\n

\u00a0But “retailers will not be hit [so badly],” says The Times, “due to the low profit margins” on coins and bars \u2013 some 1-2% versus 8-12% on jewelry.<\/p>\n

 <\/p>\n

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

BullionVault<\/strong><\/span><\/a><\/p>\n

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

 <\/p>\n

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich, Switzerland for just 0.5% commission.<\/p>\n

 <\/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 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 \u2013 and must be verified elsewhere \u2013 should you choose to act on it.<\/p>\n

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

London Gold Market Report from Adrian Ash BullionVault Thursday, 11 July 08:50 EST WHOLESALE\u00a0prices for gold retreated from an overnight surge to nearly $1300 per ounce in London trade Thursday morning, while world stock markets ticked higher with major government bonds and commodities. Gold’s earlier 4.0% jump came after Federal Reserve chairman Ben Bernanke confirmed … <\/p>\n

Continue reading “Traders Urged to ‘Buy Dips’ as Gold Eases Back from 4% Bernanke Jump”<\/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-39947","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/39947","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=39947"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/39947\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=39947"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=39947"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=39947"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}