by Ben Traynor<\/p>\n
BullionVault<\/a><\/p>\n Thursday 26 May, 08:00 EDT<\/p>\n <\/strong><\/p>\n Price of Gold Slips As Euro & Pound Gain, UK Cabinet Minister Says Britain “Has No Inflation Problem”<\/strong><\/p>\n THE DOLLAR<\/strong> price to\u00a0buy gold<\/a> slipped on Thursday morning \u2013 falling to $1519 per ounce \u2013 having retested three-week highs in overnight trading.<\/p>\n A rally on Asian stock markets failed to carry over into Europe, while prices for major commodities also showed limited movement.<\/p>\n Silver prices<\/a> handed back most of Wednesday’s gains, dropping 6% inside three hours before hovering around $37 per ounce.<\/p>\n “Gold and silver ran out of steam” in Asian trading, says one Hong Kong-based bullion dealer.<\/p>\n “We have seen some precious metals come under pressure as early profit-taking emerges in European markets ahead of the weekend and the end of the month,” adds Marc Ground, commodities strategist at Standard Bank.<\/p>\n “Adding to gold’s weakness, we have seen selling in the physical market outpace buying for the first time in six weeks.”<\/p>\n “However, we doubt this will continue,” says Ground, expecting net physical demand to\u00a0buy gold<\/a> “to return soon.”<\/p>\n The British Pound meantime rose against the US Dollar on Thursday morning after the Bank of England was urged to raise its interest rate \u2013 now held at a record low of 0.5% for more than two years.<\/p>\n “A modest increase in [Bank of England] interest rates should be taken during 2011 to stave off increases in inflationary expectations, which are already elevated,” a report by Paris-based policy institute the OECD said Wednesday.<\/p>\n “As the recovery gathers momentum in 2012, the pace of normalization of interest rates should be stepped up.”<\/p>\n “The inflationary trend could become embedded” in the UK economy warned Andrew Sentance \u2013 a member of the Bank’s Monetary Policy Committee (MPC) who has repeatedly voted for a rate rise since June last year \u2013 in a speech on Wednesday.<\/p>\n Sentance leaves the MPC this month.<\/p>\n “It still seems that the center of gravity at the Monetary Policy Committee is very much at [Mervyn King] the governor. I find that reassuring,” says the UK’s business secretary and member of its coalition government, Vince Cable, in an interview with the left-leaning New Statesman magazine.<\/p>\n “The Bank’s job, as the governor keeps pointing out, is not to look at today’s numbers, but to look 18 months ahead.<\/p>\n “We don’t have an underlying inflation problem.”<\/p>\n The MPC’s official upper tolerance of 3.0% for annual consumer price inflation has now been breached every month since Jan. 2010.<\/p>\n Consumer Price inflation for April was 4.5% year-on-year.<\/p>\n Until December 2003 the MPC targeted the Retail Price Index excluding mortgage interest payments\u00a0\u2013 also known RPIX and underlying inflation \u2013 with the core target at 2.5%.<\/p>\n RPIX for April was 5.3%.<\/p>\n The Euro also rallied Thursday morning against the Dollar after an academic at China’s central bank said the country should buy more Eurozone sovereign debt in a bid to ease the Greek crisis.<\/p>\n “Although China’s trade with Greece is only a small portion of China’s total trade with Europe, the European Union is still China’s biggest export market,” Wang Yong, professor at the People’s Bank of China’s training institute, wrote on Thursday.<\/p>\n “The renewed outbreak of the European sovereign debt crisis will cause a downturn in the entire Eurozone economy…This will affect China’s exports in the second half of the year.”<\/p>\n Elsewhere in China, the head of the country’s largest state-owned\u00a0gold mining<\/a> company has predicted a Chinese “investment rush” to\u00a0buy gold<\/a>, saying that gold demand will outstrip domestic supply<\/a> in the years ahead.<\/p>\n Gold mining<\/a> supply from world No.6 producer Peru was hit earlier this week by strike action demanding a pay rise at the Orcopampa mine. Buenaventura, the operator, is Peru’s biggest precious metals producer, with Orcopampa its largest gold mine.<\/p>\n Gold mining<\/a> workers in former world No.1 South Africa are meantime seeking a 14% pay rise.<\/p>\n “We are disappointed by this demand, very disappointed,” Elize Strydom, chief negotiator for South Africa’s Chamber of Mines, said on Monday.<\/p>\n “A 14% pay increase along with all of the other supplementary demands, means an increase in labor costs in real terms of 25%. This bears no relation to the 4.2% [consumer price inflation] and it is very distressing.”<\/p>\n “As far as we are concerned low inflation is not being felt in the shopping baskets of our membership,” counters Frans Baleni, general secretary of the National Union of Mineworkers (NUM).<\/p>\n “It is clear to me that [our members] are very determined to fight for a substantial wage increase this winter.”<\/p>\n <\/em><\/strong><\/p>\n Ben Traynor<\/p>\n BullionVault<\/a><\/p>\n Gold value calculator<\/a> |\u00a0\u00a0 Buy gold online at live prices<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" by Ben Traynor BullionVault Thursday 26 May, 08:00 EDT Price of Gold Slips As Euro & Pound Gain, UK Cabinet<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[257,687,702,741,747,794,1033],"class_list":["post-5802","post","type-post","status-publish","format-standard","hentry","category-gold-news","tag-bullion-vault","tag-gold-markets","tag-gold-news","tag-gold-prices","tag-gold-report","tag-goldgenie","tag-london-gold-market-report"],"_links":{"self":[{"href":"https:\/\/www.goldgenie.com\/blog\/wp-json\/wp\/v2\/posts\/5802","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.goldgenie.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.goldgenie.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.goldgenie.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.goldgenie.com\/blog\/wp-json\/wp\/v2\/comments?post=5802"}],"version-history":[{"count":0,"href":"https:\/\/www.goldgenie.com\/blog\/wp-json\/wp\/v2\/posts\/5802\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.goldgenie.com\/blog\/wp-json\/wp\/v2\/media?parent=5802"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.goldgenie.com\/blog\/wp-json\/wp\/v2\/categories?post=5802"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.goldgenie.com\/blog\/wp-json\/wp\/v2\/tags?post=5802"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}