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Gold Nears $1,700/oz After Bernanke QE Hints, OECD $1.3 Trillion Eurozone ‘Firewall’ And Despite Indian Gold Strike
From GoldCore
Gold Nears $1,700/oz After Bernanke QE Hints, OECD $1.3 Trillion Eurozone ‘Firewall’ And Despite Indian Gold Strike
Gold’s London AM fix this morning was USD 1,694.00, EUR 1,266.54, and GBP 1,059.55 per ounce. Yesterday's AM fix was USD 1,658.00, EUR 1,255.02 and GBP 1,047.91 per ounce.
Silver is trading at $33.07/oz, €24.77/oz and £20.72/oz. Platinum is trading at $1,656.75/oz, palladium at $660./oz and rhodium at $1,425/oz.
Gold rose 1.76% in New York yesterday and closed at $1,693.47/oz. Gold traded sideways during Asian trading and then buying in Europe drove it to over $1,696/oz.
Cross Currency Table – (Bloomberg)
Gold is targeting $1,700/oz after yesterday’s Bernanke QE hints and today’s urging by the OECD to boost the Eurozone ‘firewall’ by another $1.3 trillion.
Gold is consolidating on yesterday’s gains today above the 200 day moving average (simple) at $1,687/oz after yesterday’s biggest daily gain since January. The gains came after Ben Bernanke warned of the risks to the fragile US economic recovery and signalled the Fed would keep interest rates low and further debase the dollar – boosting gold’s inflation hedging appeal.
Gold is also likely being supported by the OECD’s warning that the debt crisis is far from over. The OECD said today that the euro zone's public debt crisis is not over despite calmer financial markets this year and warned that Europe's banks remain weak, fiscal targets are far from assured and debt levels are still rising.
The OECD said that the eurozone needs to boost crisis ‘firewalls’ to at least $1.3 trillion. Gold likes the ‘trillion’ word and talk of ‘trillions’ and will be supported by the risk of the creation of trillions of more euros, pounds and dollars in the coming months.
Gold 1 Year Chart – (Bloomberg)
Bernanke confirmed what we and more bearish analysts have been saying for some time - that the US’s rate and nature of unemployment continues to hinder any real growth in the world’s largest economy and the labour markets are worrisome compared to prior recessions.
Although the employment rate appears to be shrinking the labour participation rate (number of job seekers) has dropped off. The reason is that people are remaining out of work longer - 40% of people out of work for greater than six months, while only 25% in previous downturns. The longer workers remain out of the labour force, there is an increased probability that the housing sector will continue to drag– adding to a stagnant economy.
Bernanke said ultra loose monetary policy was still needed and he again hinted another round of QE including asset purchases. This is almost inevitable despite the recent suggestion by Bernanke that it is not.
Monday's rally was the reverse of what gold experienced on February 29, when the metal posted its biggest one-day drop in more than 3 years after Bernanke suggested that there would be no further bond buying and QE.
Bernanke is bluffing which is bullish for gold and means that gold’s recent correction may be soon to come to a close – especially as the fundamentals remain as compelling as ever.
India’s Financial and Cultural Affinity and Love Affair With Gold
Analysts continue to evaluate the impact of the Indian gold jewellers strike.
Indian jewellers are on strike to protest against a government levy on gold and the strike is entering its 11th day in most parts of India. It has brought gold imports to a near standstill from the world's biggest buyer of bullion in the peak wedding season.
The Indian government for the second time in 2012 doubled the import tax on gold coins and bars to 4% along with an excise duty of 0.3 percent on unbranded jewellery.
A Reuters poll of analysts shows the belief that India's gold import duty increase may cut gold imports by as much as a third in 2012 to their lowest level in two years, allowing China to overtake it and become the world's biggest buyer of bullion.
However, many analysts wrongly asserted that Indian demand was not sustainable at $1,000/oz and said Indian demand would fall one prices rose above $1,000/oz in 2009. They badly underestimated the Indian propensity to save in gold as a store of value over their fiat rupee in Indian banks and mattresses.
Already there is speculation that while official demand figures may fall there may again be a sharp increase in smuggling of gold into India from neighbouring Asian countries and from Dubai and the Middle East.
India’s financial and cultural affinity and love affair with gold will not end due to government taxes and they will continue to prudently buy the dips.
XAU/EUR 1 Year Chart – (Bloomberg)
OTHER NEWS
(Bloomberg) -- COMMODITIES DAYBOOK: Gold Rises on Bernanke Policy Statement
Gold futures rose the most in four weeks after Federal Reserve Chairman Ben S. Bernanke said accommodative monetary policy is still needed to bolster the U.S. labor market.
(Bloomberg) -- Gold May Re-Test $1,550 in Second Quarter, Deutsche Bank Says
Gold may fall to as low as $1,550 an ounce in the second quarter before resuming its long-term gains, Deutsche Bank AG said in an e-mailed report today.
(Bloomberg) -- Jewelers in India Extend Strike to 11th Day to Protest Taxes
Jewelers in India, the world’s biggest buyer of gold, extended a nationwide strike demanding the withdrawal of a tax on non-branded jewelry to 11th day, a trade group said.
“We are expecting a positive decision from the government in the next 48 hours,” Bachhraj Bamalwa, chairman of the All India Gems & Jewellery Trade Federation, said in a phone interview today.
The federation also wants the government to reduce the import duty on gold and abolish the 1 percent tax on cash purchases of gold in excess of 200,000 rupees, Bamalwa said.
(Bloomberg) -- Crude Oil Gains After Bernanke Calls for Looser Monetary Policy
Oil advanced for a second day in New York after Federal Reserve Chairman Ben S. Bernanke said accommodative monetary policy is needed to lower unemployment, making commodities a more attractive investment. Futures rose 16 cents after Bernanke said further improvement in the job market will require keeping the central bank’s interest rates low. Oil dropped earlier on concern that Europe’s debt crisis will slow growth. Trading volume was near the lowest level of the year.
For breaking news and commentary on financial markets and gold, follow us on Twitter.
NEWS
(Reuters)
Gold eases after rally; Bernanke boosts sentiment
(Bloomberg)
Dollar Trades Near Lowest This Month Against Euro on Fed Stimulus Talk
(The Australian)
Gold may crack $US2000 price on demand in China, India
(MarketWatch)
AngloGold CEO: Gold could top $2,000/oz. this year
COMMENTARY
(Zero Hedge)
Video- On The Price Of Gold
(King World News)
Embry - Massive QE Near as System Moves Closer to Collapse
(Perth Mint Bullion)
Fake Bars - The Facts
(Zero Hedge)
"We Have Entered The Most Favourable Era For Gold Prices In Our Lifetime”
(GoldSeek)
Ron Paul: A Fistful of Euros
(YouTube)
CBS: Global Bank Network – SWIFT - Ready to Cut Iran
»
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Oh sweet insanity, the megalo's last respite:
http://www.quickmeme.com/meme/3ohu9l/
Sooooo.............infinity it is.
When will people quit using a decreasing dollar to measure the value of gold? Gold/silver priced in dollars is practically meaningless for any other purpose than to use the soon-to-be-worthless paper in exchange for silver/gold.
There needs to be a massive mind-shift in how the PMs are valued - even by many of their strongest advocates.
How many ounces of silver to buy a house, a car, a week of groceries? Then we know what it's value is.
If gold/silver is real money, then it is counter-productive to constantly view it in terms of un-real money. Who cares what the 'price' of the clothes the emporer's attendants are demanding if he doesn't have any clothes at all? And when it comes to the value of the dollar - the emporer has no clothes.
my roomate's sister makes $85 hourly on the computer. She has been fired from work for 6 months but last month her paycheck was $16158 just working on the computer for a few hours. Read more here ..... http://lazyCash9.com
Bernanke must thing we are all such gullable fucks
bernanke knows we are mostly comprised of hapless gullible fucks
Does this mean that I have to pay another new tax on the gold stuff going on close out sale this weekend at Target?
Yeah. Because Indians are going to go on strike and reject gold in the midst of staggering hyper inflation. I imagine their imports will surge tax free in the black market. All bear arguments for gold assume everyone is a dumbass.
falling like a rock right now...
Someone please clue the rookie in.
It's all designed to blow your mind.
Hey, it was falling like a rock when I posted it.
Anyway, I love being labeled a rookie, at least nobody will be searching my river for lost wealth when the time comes.
In a Gerald Celente interview posted here yest Gerald said as far as his invesments he is all in gold with a little silver. Said he doesn't give investment advice but that is where he is. He said downside risk if it went below 1550 was to 1400, but said he was still in it (stay in it) for the long term and saw 2000 on the horizon.
http://ausbullion.blogspot.com/
Counterpoint from the paperbugs: Yest "hungarianboy" called for a (nother) $100 fall in the price of gold today.
Cutting edge avatar "Trav" was strangely silent on the issue.
Get your shorts in! Get your shorts in! TPTB won't stand for a rise in PM's.
A years worth of silver in 10 minutes about to be dumped on the market!!
You'd better be jack rabbit quick about it......zero room for error.
oh, it's been a while since I stacked, think it was back at 1400$ :) ... as soon as my bots get qeaction on the radar, I'll add couple of ounzes...
thanks Ben! I do love ya in some odd way...
Why, Comrade Jim Cramer says: We are in the middle of the most robust bull market he has seen! Such is the slavish devotion to the central planning masters. At the same time on Bloomberg, they were discussing the slowing US economy. What strange times we live in...
Somebody should start making a list of all the criminals who are sending us towards armageddon. Let's see... Summers, Greenspan, Paulson, Bernanke, Von Rompuy and the Eurocrates, the totally corrupt country of Greece, the devil's lair Goldman...feel free to add :-)
Sometimes I would just like to pummel Cramer and sometimes I think he is a sad pathetic weenie. But I would still like to pummel him
1700 today! 2400 by the end of the year watch...
I really want to know how bullion vendors (e.g. GoldSilverBull) can sell 1oz Candadian Maples for $1700 while the Royal Canadian Mint sells them for $2700-$3000.
It's really troubling me. I'm worried about fake gold coins...
I think the Royal Canadian Mint is probably covering some overhead in that price... ceremonial presentation box, etc?
But I do also think you have to buy your stock from reputable, long-establshed, dealers too.
With the proliferation of gold will come the proliferation of fraudsters... so heads up.
The Indian government for the second time in 2012 doubled the import tax on gold coins and bars
See this is the kinda thing I don't like. This is when governments start making things illegal and pricing things to take the return out of them - like tax on fuel, cigarettes, etc
The f'ing governments can always have the last laugh, cos they can just change the rules when they want.... no?
Back and forth: YES!!!! There is going to be QE55!!!
NOOO! No more QE ... up and down like a yo-yo goes the gold price which is what Zero Hedge is all about ... the price of dollars in gold.
Meanwhile, there is the dollar price in petroleum which is bankrupting the world. The Yo-Yo of Death: the high price which kills business and credit then the low price that immediately follows the high price.
This low price renders unavailable the expensive deepwater crude we all love so much.
The price of dollars in gold is meaningless. The price of dollars in petroleum is everything, the sun the stars the moon and the deep blue sea.
Bernanke? Who dat?
hMMMM,,, USA is sure pissing off alot of countries lately (financialy speaking) ...
This Indian gold strike is India's little game see the price ain't dropping, QE is coming and the strike will be over - built up demand will break the dam, watch gold price pop up like crazy.