{"id":42167,"date":"2013-09-19T10:09:54","date_gmt":"2013-09-19T14:09:54","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=42167"},"modified":"2013-09-19T10:09:54","modified_gmt":"2013-09-19T14:09:54","slug":"qe-unlimited-sparks-risk-party-dollar-sinks-precious-metals-jump","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/09\/19\/qe-unlimited-sparks-risk-party-dollar-sinks-precious-metals-jump\/","title":{"rendered":"‘QE Unlimited’ Sparks ‘Risk-On Party’ as Dollar Sinks, Precious Metals Jump"},"content":{"rendered":"

London Gold Market Report<\/strong>
\nfrom Adrian Ash<\/strong>
\nBullionVault<\/strong><\/a><\/span>
\nThurs 19 Sept 08:35 EST<\/strong><\/p>\n

WORLD stock markets, foreign currencies and commodities extended yesterday’s jump versus the US Dollar in Asia and London on Thursday morning, with gold regaining the $1370 level it leapt to after the Federal Reserve voted not to trim its quantitative easing program.<\/p>\n

Defying the expectations built since April, the Fed gave financial markets what one FX strategist called “a massive green light for a risk-on party.”<\/p>\n

\u00a0Silver hit a new 5-week low shortly before the US central bank’s announcement. It stood 9.5% higher barely an hour later.<\/p>\n

\u00a0“We are in\u00a0QE unlimited<\/a>,” said money-manager and\u00a0Gloom, Boom & Doom publisher Marc Faber, speaking to Bloomberg last night and stating that “I always buy gold<\/a>…I view it as an insurance policy. I think responsible citizens should own gold.<\/p>\n

\u00a0“The Fed don’t know anything else to do [but print]. They’ve boxed themselves into a corner.”<\/p>\n

\u00a0Discussing the next likely chair of the US central bank, “Janet Yellen will make Mr.Bernanke look like a hawk,” Faber said.<\/p>\n

\u00a0The US stock market yesterday surged to new all-time highs.<\/p>\n

\u00a0Gold prices<\/a>\u00a0gained 6.4% from their earlier low, and silver enjoyed its biggest one-day jump since June 2012.<\/p>\n

\u00a0Bond prices rose to push 10-year Treasury yields to a 3-week low, falling at the fastest pace since 2011.<\/p>\n

\u00a0“The [failure to taper] put markets in celebratory mood,” says Commerzbank’s daily precious metals note, adding that “the development of ETF holdings over the next few days will give us a clearer picture here.<\/p>\n

\u00a0Because on Wednesday, says the bank, “gold ETFs again saw slight outflows.”<\/p>\n

\u00a0Investors in all markets “turned to the buy side with a vengeance,” says Edward Meir for brokers INTL FCStone.<\/p>\n

\u00a0But “although the Fed decision is a potential game changer and may give gold a new lease on life,” Meir adds, “we would be looking for higher volumes and increased ETF buying to lend further credibility to Wednesday’s gain.”<\/p>\n

\u00a0“I cannot get overly excited about gold up here,” agrees Marex Spectron’s David Govett.<\/p>\n

\u00a0“This rally was as much about short covering as it was about fresh buying. Fundamentally nothing has changed. At some point the Fed will taper.”<\/p>\n

\u00a0Silver’s 7.1% rise from Wednesday to Thursday’s\u00a0London Fix<\/a>\u00a0was the 78th largest move in 45 years.<\/p>\n

\u00a0Gold began rising before Wednesday’s statement, adding $20 of the $83 per ounce it would gain by this morning’s peak in late Asian trade.<\/p>\n

\u00a0Gold rose less quickly for non-US investors, however, as the Euro and Sterling both hit their best levels since midwinter on the FX market.<\/p>\n

\u00a0The Dollar also fell in a straight line against emerging-market currencies previously dented by taper expectations, losing 3% against the\u00a0Indian Rupee<\/a>, Brazilian Real and Turkish Lira.<\/p>\n

\u00a0“We think it’s very important that emerging markets grow and are prosperous,” said chief US central banker Ben Bernanke on Wednesday.<\/p>\n

\u00a0“We play close attention to what’s happening in those countries. It affects the United States. [But] what we’re trying to do with our monetary policy…is to create a stronger US economy.”<\/p>\n

\u00a0Meantime in India \u2013 the world’s largest consumer market for gold \u2013 industry group the Bombay Bullion Association said it unanimously backs nationalist BJP candidate Narendra Modi as prime minister in the 2014 election.<\/p>\n

“The bullion traders in this country are desperately looking for a change in the Indian political system,” said BBA president Mohit Kamboj.<\/p>\n

\u00a0“Narendra Modi is the right choice,” he added, repeating how\u00a0gold and politics in India<\/a>\u00a0were seen interacting earlier this week by BBA colleague Mukesh Mehta.<\/p>\n

\u00a0“We wish BJP to come to power and run this country.”<\/p>\n

\u00a0Ruling Congress Party economic affairs secretary Arvind Mayaram today said the government’s aggressive anti-gold import rules had cut inflows “drastically”.<\/p>\n

\u00a0“Because of the measures we have taken we expect imports of only 750 tonnes [in 2013],” he said \u2013 a drop of 11% from fiscal-year 2012.<\/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 fully allocated bullion already vaulted in your choice of London, New York, Singapore, Toronto or Zurich 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 Thurs 19 Sept 08:35 EST WORLD stock markets, foreign currencies and commodities extended yesterday’s jump versus the US Dollar in Asia and London on Thursday morning, with gold regaining the $1370 level it leapt to after the Federal Reserve voted not to trim its quantitative easing program. … <\/p>\n

Continue reading “‘QE Unlimited’ Sparks ‘Risk-On Party’ as Dollar Sinks, Precious Metals 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-42167","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/42167","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=42167"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/42167\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=42167"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=42167"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=42167"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}