{"id":27034,"date":"2012-02-01T09:02:04","date_gmt":"2012-02-01T14:02:04","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=27034"},"modified":"2012-02-01T09:02:04","modified_gmt":"2012-02-01T14:02:04","slug":"gold-stocks-and-the-euro-all-gain-in-risk-asset-recovery-as-positive-manufacturing-data-confirms-chinas-soft-landing","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2012\/02\/01\/gold-stocks-and-the-euro-all-gain-in-risk-asset-recovery-as-positive-manufacturing-data-confirms-chinas-soft-landing\/","title":{"rendered":"Gold, Stocks and the Euro All Gain in “Risk Asset Recovery” as Positive Manufacturing Data “Confirms China’s Soft Landing”"},"content":{"rendered":"

London Gold Market Report<\/strong>
\n from Ben Traynor<\/strong>
\n BullionVault<\/strong>
\n Wednesday 1 February 2012, 08:30 EST<\/strong><\/a><\/p>\n

THE U.S. DOLLAR cost of\u00a0buying gold\u00a0climbed to $1750 an ounce Wednesday morning London time \u2013 gold’s highest level since early December \u2013 while commodity prices also ticked higher and stock markets surged following the release of better-than-expected manufacturing data from several major economies.<\/p>\n

Prices for\u00a0buying silver\u00a0rallied to $34.01 \u2013 though they remained below yesterday’s high.<\/p>\n

US Treasury bond prices fell meantime, while the Euro rallied 1.3% against the Dollar.<\/p>\n

“Buyers have returned to the Euro, which is helping the situation in gold,” says Ole Hansen, senior manager at Saxo Bank.<\/p>\n

“[Gold] had a bit of lackluster profit-taking yesterday but didn’t break anything important on the downside, which helped confirm that being long is back in vogue.”<\/p>\n

“I think that going forward, gold is still going to be looking at the US and the Euro zone for direction,” reckons Phillip Futures analyst Ong Yi Ling in Singapore.<\/p>\n

The wholesale market price of\u00a0buying gold\u00a0in Euros meantime rose to its highest level since September \u2013 hitting \u00a0\u20ac42,864 per kilo (\u20ac1333 per ounce) \u2013 before dropping ahead of US open.<\/p>\n

Based on month-end PM\u00a0London Fix\u00a0prices, January saw gold’s biggest calendar month gain in Dollar terms since September 1999. The Dollars-per-ounce price of buying gold\u00a0was fixed at $1744 yesterday \u2013 13.9% up on the last PM Fix of 2011.<\/p>\n

January also marked gold’s best start to a year since 1980, Amanda Cooper at Reuters reports.
\nStock markets meantime recorded their best January since 1994, according to Bloomberg, which cites a 5.8% rise for the MSCI All-Country World Index if dividends are included.<\/p>\n

“Three things have been behind the recovery in risk assets,” says Mike Ryan, chief investment strategist at UBS Wealth Management Americas in New York.<\/p>\n

“Progress on a fiscal compact in Europe, better-than- expected economic data and more accommodative central-bank policies.”<\/p>\n

Stock markets gained strongly Wednesday morning too \u2013 with the FTSE 100 in London up 1.4% and Germany’s DAX up 2.4% by lunchtime \u2013 following news of worldwide manufacturing growth.<\/p>\n

China’s manufacturing sector grew in January, according to the official purchasing managers index release, which rose to 50.5 from 50.3 last month (a figure above 50 indicates expansion).<\/p>\n

“Today’s data further confirmed a soft-landing story for China,” reckons Ken Peng, economist at BNP Paribas in Beijing.<\/p>\n

“However, consumer demand may weaken after holiday effects disappear.”<\/p>\n

“New export orders declined,” points out Wei Yao, China economist at Societe Generale.<\/p>\n

“Together with a depressed level of backlog orders…the boost in total orders looks temporary, and suggests that manufacturers are not very optimistic about the near-term outlook. Given today\u2019s report, we think year on year export and import growth will prove to be barely positive in January.”<\/p>\n

China’s PMI figure “was expansionary, but no so expansionary that we anticipate [monetary] tightening,” says one gold dealer here in London.<\/p>\n

“There will be a power transition in Beijing this year,” adds a dealer in Hong Kong.<\/p>\n

“I expect maintaining stability at all cost is what this government is going to do.”<\/p>\n

Britain’s manufacturing sector also expanded in January, with the PMI coming in at 52.1 \u2013 having been below 50 the previous month. Similarly, German manufacturing resumed growth last month, according to its January PMI, which was reported today as 51.0.<\/p>\n

Eurozone manufacturing as a whole, however, continued to shrink, albeit at a slower rate, with the PMI rising from 46.9 in December to 48.8 last month.<\/p>\n

Similar manufacturing data for the US are released later on Wednesday. The latest ADP Employment Report meantime shows the US added 170,000 private sector jobs in January \u2013 down from around 300,000 the previous month. The official nonfarm payrolls data are due to be released by the US Bureau of Labor Statistics on Friday.<\/p>\n

Greece’s private sector creditors may be offered a ‘sweetener’ in the form of a bond whose coupon is tied to future economic growth, Bloomberg reports. Negotiations \u2013 which Greek finance minister Evangelos Venizelos said yesterday are “one step” from success \u2013 stalled last week after parties could not agree on the size of the coupon on new bonds for which existing ones would be swapped.<\/p>\n

The government in India \u2013 the world’s largest source of demand for\u00a0buying gold\u2013 announced Wednesday it is raising the base import price of gold by 5.7% to $556 per 10 grams. Silver’s base import price will rise 12% to $1067 per kilo. The base import price is the price used to calculate the import duty.<\/p>\n

The move follows last month’s switch from discrete to ad valorem taxation, a move which also saw the effective duty on gold almost doubled.<\/p>\n

The higher import duties have had a “definite impact” on demand for\u00a0buying gold in India, according to Harshad Ajmera, proprietor of JJ Gold House in Kolkata.<\/p>\n

Ben Traynor<\/strong>
\nBullionVault<\/strong><\/a><\/p>\n

Gold value calculator \u00a0\u00a0| \u00a0\u00a0Buy gold online at live prices<\/strong><\/a><\/p>\n

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.<\/p>\n

(c) BullionVault 2011<\/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

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

London Gold Market Report from Ben Traynor BullionVault Wednesday 1 February 2012, 08:30 EST THE U.S. DOLLAR cost of\u00a0buying gold\u00a0climbed to $1750 an ounce Wednesday morning London time \u2013 gold’s highest level since early December \u2013 while commodity prices also ticked higher and stock markets surged following the release of better-than-expected manufacturing data from several … <\/p>\n

Continue reading “Gold, Stocks and the Euro All Gain in “Risk Asset Recovery” as Positive Manufacturing Data “Confirms China’s Soft Landing””<\/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-27034","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/27034","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=27034"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/27034\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=27034"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=27034"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=27034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}