London Gold Market Report
\nby Adrian Ash
\nBullionVault
\nFriday 23 Nov, 08:25 EST<\/p>\n
“Exciting Week” Ahead for Gold as Silver Hits 6-Week High, US Prepares $99Bn Bond Sale<\/p>\n
The DOLLAR PRICE of physical gold rose back to $1734 per ounce in London on Friday morning, nearing the top of the last 5 weeks’ trading range as so-called “risk assets” also crept higher.\u2028\u2028Asian and European stock markets were slightly stronger, while the single Euro currency pushed back above $1.29.\u2028\u2028Commodity prices added 0.5% on the broad GSCI index. Silver touched its best Dollar-price in 6 weeks above $33.50 per ounce.\u2028\u2028”Activity is muted,” said one London dealer, with US markets due to re-open but many traders extending the Thanksgiving holiday.\u2028\u2028”[The gold price] is stuck between $1715 and $1740 area for now,” Reuters quotes Ronald Leung at Lee Cheong Gold Dealers in Hong Kong.\u2028\u2028”But speculators are still bullish on gold, as uncertainties about the ‘fiscal cliff’ hang around and they believe that central banks around the world will stay loose on monetary policy.”\u2028\u2028On a technical analysis, the gold price “is just a few dollars shy of its 50-day moving average sitting at $1741,” says a note from Swiss investment and bullion bank, UBS.\u2028\u2028”More importantly, a key technical level [is] lurking at $1739.10…A break above this level, which is the month\u2019s high, would be a crucial bullish development.\u2028\u2028Again citing the US holiday, “Market participants may have to wait until after the weekend to see some action,” UBS adds. “[European] investors still have the day ahead to position for what may be an exciting week.”\u2028\u2028Next week the US Treasury will seek to raise $99 billion in new debt, according to Bloomberg data.\u2028\u2028Treasury bond prices rose Friday, pushing interest rates down to just 1.67% on 10-year debt.\u2028\u2028”Pimco is avoiding, or trying to keep a low weighting, on maturities beyond 10 years,” said Tony Crescenzi, a portfolio manager at the giant bond-fund group, in an interview. “Because we know the Fed\u2019s intent is to reflate a deflated economy.”\u2028\u2028Nearer-term, he believes, “Treasuries provide good insurance against macro risk.”\u2028\u2028British Gilts and German Bunds also rose Friday morning, reducing 10-year German yields to just 1.42% \u2013 despite stronger-than-expected Ifo business confidence data \u2013 after the S&P ratings agency cut the status of 3 more Spanish banks.\u2028\u2028Spain’s sovereign debt prices fell, nudging 10-year interest rates up to 5.68%.\u2028\u2028Spain’s wealthiest region, Catalonia, goes to the polls on Sunday for elections which local president Artur Mas has called a referendum on independence from Madrid.\u2028\u2028Over in Athens meantime, negotiations continued over \u20ac31.2 billion in bail-out funds which Greece has been waiting for since June from the International Monetary Fund.\u2028\u2028The IMF said this morning that Greek debt would be “viable” if cut to 124% of GDP by 2020. It is currently on track to hit 190% by 2014.\u2028\u2028”It’s natural [we] look out for other types of assets,” today’s Financial Times quotes a Brazilian economist after new data showed the central bank adding more than 17 tonnes of gold bullion to its national reserves in October.\u2028\u2028That took Brazil’s total reserves to 53 tonnes, an 11-year high.\u2028\u2028The latest gold reserves data from the IMF also show Turkey, Kazakhstan and Russia again raising their national holdings as well.<\/p>\n
Adrian Ash
\nBullionVault<\/p>\n
Gold price chart, no delay | Buy gold online at live prices<\/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 today vaulted in Zurich on $3 spreads and \u2013 starting this Sunday \u2013 just 0.5% dealing fees.<\/p>\n
(c) BullionVault 2012<\/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","protected":false},"excerpt":{"rendered":"
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