{"id":40000,"date":"2013-07-12T09:34:55","date_gmt":"2013-07-12T13:34:55","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=40000"},"modified":"2013-07-12T09:34:55","modified_gmt":"2013-07-12T13:34:55","slug":"precious-metals-cut-weekly-gains-as-bernankes-new-qe-commitment-questioned","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/07\/12\/precious-metals-cut-weekly-gains-as-bernankes-new-qe-commitment-questioned\/","title":{"rendered":"Precious Metals Cut Weekly Gains as Bernanke’s New QE Commitment Questioned"},"content":{"rendered":"

London Gold Market Report<\/strong>
\nfrom Adrian Ash<\/strong>
\nBullionVault<\/strong><\/a>
\nFriday, 12 July 08:20 EST<\/strong><\/p>\n

BOTH SILVER and gold slipped in London on Friday morning, edging down to $1271 per ounce and $19.80 respectively.<\/p>\n

\u00a0European equities pushed higher while the US Dollar rallied and major government bond prices rose.<\/p>\n

\u00a0US crude oil prices headed for their 3rd weekly gain on the trot, rising above $105 per barrel.<\/p>\n

\u00a0Gold cut this week’s gain to 3.9%. Silver prices held onto 4.2% week-on-week gains.<\/p>\n

“A weekly close [in the\u00a0gold price<\/a>] above $1267 will bring in fresh buying on the belief [of a] bullish signal,” says\u00a0a technical note<\/a>\u00a0from market-maker Scotia Mocatta.<\/p>\n

\u00a0Scotia pegs near-term resistance in the gold price just above Thursday morning’s 2-week high of $1299 per ounce \u2013 hit after Federal Reserve chairman Ben Bernanke said US monetary policy will remain “highly accommodative for the foreseeable future.”<\/p>\n

\u00a0Doubting Bernanke’s assurances, however, “You have to be\u00a0a brave man or woman to hold gold<\/a>\u00a0into a Fed tightening cycle and a Dollar rally,” writes The Daily Telegraph’s international business editor \u00a0Ambrose Evans-Pritchard.<\/p>\n

\u00a0“My guess is that the Fed will indeed to have to retreat from [tapering] QE in the end, just as it had to back away from premature tightening after QE1 and QE2.<\/p>\n

\u00a0“But we are not there yet, and they will take longer to blink this time.”<\/p>\n

\u00a0A new report from ANZ Bank agrees, saying that the gold price is likely to fall further short term because “volatility remains high, and the drivers that have seen gold drop 25% so far this year remain in place.”<\/p>\n

\u00a0“With many [gold] investors remaining trapped in a falling market,” says the latest Commodities Weekly from French investment bank and bullion dealers Natixis, “there may be more rounds of bloodletting to go before some degree of sanity returns.”<\/p>\n

\u00a0Natixis commodities analyst Nic Brown now expects “that the price of gold will drop slightly lower over the remainder of the year [before] the gradual return of net investment demand offers increasing support” in 2014 but the average annual price drops to $1200 per ounce.<\/p>\n

\u00a0Over in Turkey,\u00a0a strike by workers at the Turkish State Mint<\/a>\u00a0\u2013 reputedly the world’s\u00a0heaviest producer of gold bullion coins<\/a>\u00a0between 2000 and 2010 \u2013 has crimped supply and started to push local gold prices higher, according to\u00a0Hurriyet Daily.<\/p>\n

\u00a0In wholesale trading, “idiosyncratic factors to do with supply are driving up lease rates, and driving up the gold price at the moment,” said Roubini Global Economics analyst Gary Clark to CNBC yesterday.<\/p>\n

\u00a0“But we haven’t seen a rise in tail risk, so that rally should not be sustained.”<\/p>\n

\u00a0Yesterday in Frankfurt, European Central Bank president Mario Draghi replied to Portuguese MEP Nuno Melo asking\u00a0whether Cyprus’ planned sale<\/a>\u00a0of some gold bullion means “other member states may be ‘obliged’ to sell their reserves?”<\/p>\n

\u00a0Most Eurozone reserve assets are now held and managed by the ECB, said Draghi. Even where the national central bank retains control of some reserves, he went on, such transactions are “above a certain limit\u00a0subject to approval by the ECB<\/a>\u00a0in order to ensure consistency with the exchange rate and monetary policies of the Union.”<\/p>\n

\u00a0In 2009 Draghi famously rejected then Italian prime minister Berlusconi’s\u00a0attempt to tax Italy’s national gold reserves<\/a>\u00a0\u2013 the world’s third largest \u2013 when head of the Banca d’Italia.<\/p>\n

\u00a0Over in China meantime, stock markets closed lower as new data showed a surge in consumer credit but a slowdown in money-supply growth.<\/p>\n

\u00a0Early Monday morning will bring China’s second-quarter GDP data, notes Marc Ground at Standard Bank \u2013 “generally not as important” for the gold price as for industrial commodities, but “Asian physical buying (particularly from China) has provided a crucial crutch for gold amid Fed tapering concerns.”<\/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

 <\/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

\n

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

London Gold Market Report from Adrian Ash BullionVault Friday, 12 July 08:20 EST BOTH SILVER and gold slipped in London on Friday morning, edging down to $1271 per ounce and $19.80 respectively. \u00a0European equities pushed higher while the US Dollar rallied and major government bond prices rose. \u00a0US crude oil prices headed for their 3rd … <\/p>\n

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