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Wholesale prices to buy gold ticked
back above $1,570 per ounce in London trade Thursday lunchtime, but held onto
a 0.5% loss for the session as stock markets fell ahead of today's euro
crisis summit in Brussels – the 12th such meeting in 12 months.
"Nein! No! Non!" said the front-page
of German finance daily Handelsblatt, urging
chancellor Angela Merkel not to concede to calls for weaker monetary or
fiscal policy across the 17-nation currency zone.
Syria's state TV meantime reported what it called "terrorist"
bomb attacks on the main court in Damascus, while neighboring Turkey deployed
anti-aircraft rockets along the border.
"There's no semblance of a safe-haven [in gold] at the moment,"
says Société Générale's
Robin Bhar, quoted by Reuters.
"But as the price goes lower that bid [to buy gold]
does come back as you maybe get some renewed investor interest,"
he adds, citing sovereign wealth funds and central banks.
Silver
prices also slipped again early
Thursday, "feeling the effects of lower base metals and crude oil
prices," according to one dealer, and retreating towards last week's new
2012 lows beneath $26.70 per ounce.
Brent crude – Europe's benchmark oil price – today slipped to
$92.25 per barrel, only just above the marginal cost of production according
to analysts at Sanford C. Bernstein & Co.
The recent drop "marks the start of the next oil price
up-cycle," they believe.
Back in silver bullion,
"I suspect some fairly chunky stops will be lurking just under
these levels," says refiner and financier MKS's senior trader in Sydney,
Alex Thorndike.
"If we get closer, especially considering how thin this market is
currently, we could see larger players gunning for these" to drive silver
prices still lower, he believes.
Major government bonds meantime pushed higher Thursday morning, nudging
10-year German interest rates down to 1.51% per year as the euro currency
slumped one cent to a three-week low of $1.2410.
Italy had to pay 6.19% per year today at a sale of new 10-year bonds, up
from 6.03% a month ago.
Today in Greece – where bank deposits have apparently turned
positive since the election of pro-bailout Samaras party last week, and where
police in Thessaloniki said they'd broken up a euro-coin counterfeiting ring,
the country's first such discovery – the new Parliament was sworn in.
New prime minister Antonis Samaras' government
yesterday dismissed the senior management of the Greek national bank, risking
a revival of "the practice of making political appointments"
according to one banker.
Cyprus was granted formal approval for a joint European Union, IMF and
European Central Bank bail-out worth €10 billion – well over half
the country's annual economic output.
Slovenia "will see a Greek scenario" said its prime minister, Janez Jansa, in a radion interview unless debt-growth is stemmed by further
spending cuts and tax hikes.
German unemployment today showed a rise of 7,000 for June, only its third
rise of the last three years but suggesting that "the resilience of the
German labour market is slowly cracking up,"
according to analysts at ING bank.
Eurozone consumer confidence worsened in June, falling to its worse level
since mid-2009 on the European Commission's latest survey. Industrial
sentiment worsened to 2.5-year lows.
A raft of UK economic data for the first quarter was revised lower, with
GDP now seen contracting by 0.3% from the end of 2011.
"The elevated cost of wholesale funding for banks has continued to
be passed through" to mortgage and business borrowers, the Bank of
England said today in its latest Credit Conditions report.
Looking ahead, UK lenders see credit getting tighter for corporate
borrowers than for households, especially in commercial real estate.
"Markets await news on the EU summit," says Thursday's note
from Standard Bank in London, but "not much progress is expected on the
key issues...[such as] a move towards a common bond
markets, as Germany remains vehemently in opposition.
"Consequently, we feel that the Euro will stay on the backfoot, lending a downward bias to precious metal
prices."
Investment bank Morgan Stanley today cut its precious metal forecasts for
2012-2014, mapping the cut onto its outlook for global commodity prices, but
remaining long-term bullish.
Morgan Stanley's analysts now see the price to buy gold averaging $1,677 per ounce this
year, down from the previous forecast of $1,825.
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