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WHOLESALE PRICES in the gold investing
market continued to rise Thursday morning in London, extending yesterday's
2.8% jump after the world's biggest central banks offered unlimited
short-term loans to their local banking sectors.
Crude oil also held near two-week highs after the United Kingdom called for
"international financial isolation" of Iran following this week's
attack on its embassy in Tehran.
The Euro currency traded just shy of $1.35 – some 2.5¢ above
Wednesday's start – as Spain successfully sold €3.75 billion in
new 5-year debt, offering the highest interest rate since 2005 according to
Bloomberg.
European stock markets failed to extend yesterday's 3% jump, however,
drifting sideways by lunchtime.
"The ECB's monetary policy is constantly guided by the goal of
maintaining price stability in the Euro area over the medium term," said
Mario Draghi Thursday morning in his second speech
as European Central Bank president.
"And when I say this, I mean price stability in either direction,"
he added – meaning both the threat of inflation and of deflation in
prices.
There are "only 10 days to save the Euro" said a raft of newspaper
and website headlines Thursday, quoting Euro commissioner Ollie Rehn's reference yesterday to the European summit to be
held in Brussels at the end of next week.
Urging tighter Eurozone fiscal co-operation, "A credible signal is
needed to give ultimate assurance over the short term," said the ECB's Draghi today.
Wednesday's $30 rise in gold investing prices saw the metal "trading
right through the previous trendline
resistance," says the latest chart analysis from bullion bank Scotia Mocatta.
"This has shifted intermediate term technicals
to neutral. We would like to see the trendline hold
on the downside, around $1720, to confirm a trend reversal" after gold
investing prices slid from a record peak of $1920 in early September.
"The 30-week moving average at $1652.61 continues to offer good
support," according to the latest technical analysis from Axel Rudolph
at Commerzbank.
But "Year-end is approaching and few investors want to be heroes,"
says UBS precious-metals analyst Edel Tully, citing
a stronger Dollar and a lack of "conviction" amongst gold buyers
for gold not attracting "safe haven" flows amid the Eurozone
crisis.
The MSCI Barra index of global stock markets surged 3% on Wednesday to end
November 0.8% higher.
Physical gold prices rose 1.4% last month against the US Dollar, while the
Euro currency fell over 3% and silver prices fell more than 8%.
Wednesday saw the Gold/Silver Ratio – which shows how many ounces of
silver it takes to buy 1 ounce of gold – jump to 55.7, its highest
level since late September.
Averaging 53 since the gold price was allowed to float in 1968, the
Gold/Silver Ratio hit a 3-decade low of 32 in May this year, as silver prices
doubled inside six months to near all-time record highs.
"[Gold investing] clearly cannot be defined as having been a
bubble," Bloomberg today quotes Credit Suisse's precious metals analyst
Tom Kendall.
The volume of gold bullion held to back shares in exchange-traded trust funds
yesterday rose to a fresh record of 2,356 tonnes, the newswire says, worth
$133 billion at today's London Gold Fix.
Jewelry sales in China – the world's No.2
gold consumer market – could reach CNY330 billion ($52bn) in full-year
2011 according to Cheng Binghai, chairman of the
Shanghai Gold & Jewelry Trade Association.
China now accounts for a quarter of Australia's mineral and energy exports,
which reached a quarterly record of A$49 billion (US$50bn) between July and
Oct. according to new data today, driven by higher prices for coal and gold
mining output
But a survey from HSBC Bank yesterday showed China's manufacturing sector
contracting for the first time since Feb. 2009, with new export orders
falling sharply, while the People's Bank of China cut the amount of savers'
deposits which commercial banks must keep back, rather than lending on, by
half-a-percent to 20.0%.
"This is the first time in 3 years that the central bank has lowered the
required reserve requirement," says Beijing's Economic Observer,
"an indication that the central bank may gradually be starting to loosen
monetary policy settings."
Japan's steel industry will cut its output sharply this quarter,
the head of Nippon Steel told a conference today.
Brazil's central bank yesterday cut interest rates in Latin America's largest
economy by half-a-point for the third month running.
"Given the low growth environment [worldwide], we do not feel it is
prudent to be long on the commodity complex indiscriminately," said a
report from Morgan Stanley analysts earlier this week.
"The defensive nature of gold should continue to support investment
demand as investors look for safe havens," the report says, repeating
the investment bank's call for gold investing to outperform other commodities
in 2012, rising to an average price of $2,200 per ounce.
"A continued low or negative real interest rate environment will also
provide support" for gold investing, the Morgan Stanley team believe.
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