The Daily Nugget – gold price pauses
Whilst this week may have proved a small test for those who recently decided to buy gold bullion, the long-term outlook for gold remains bullish thanks to on-going central bank decisions. Traders in Hong Kong are reporting an increase in demand to buy gold in the belief the sell-off is coming to an end.
Gold prices have dipped to as low as $1,730 this week and this is still being seen as a level of support as we go into the end of the week, particularly as eyes remain turned towards the EU summit which will today commence in Brussels. Commentators feel that this summit has less of a doomsday feel than that of other summits, therefore hopes of reaching some kind of resolution as to the next steps going forward remain high.
Hopes of further clarity regarding Spain’s bailout, Greece’s future and the banking union are at present keeping the euro, and therefore gold, relatively steady in the short-term.
The euro may also take a bit of a knock later as data is published showing the health of Spain’s banking system.
Yesterday, the Eurozone heavyweight Germany slashed its 2013 growth forecast to just one per cent. The change of forecast was due to the feeling that previous forecasts did not take into account the impact of ‘global headwinds’. Despite the revision some feel that it is still too optimistic as it had not appreciated the full impact of budget cuts across the euro area as well as global financial issues.
Gold price nonplussed
This morning the gold price seemed nonplussed when it came to fresh Q3 GDP data from China, which whilst better than expected, still showed a slowdown for the 7th quarter in a row. The Premier, Wen Jibao, was quoted as saying he remained confident that the country would achieve its 2012 growth target of 7.5%, therefore the printing presses are expected to remain silent for a while longer.
So, someone tried to blow up the Federal Reserve Bank of New York yesterday and failed. The Fed was the would-be bomber’s target – as ‘I came up to this conclusion that targeting America’s economy is most efficient way to draw the path of obliteration of America.’ Whilst there was never any chance of the plot coming to fruition it would be interesting if it caused some Americans to think about the enormous power the Federal Reserve has and how much their lives would be impacted had the man been successful.
In one sense the insurgent is more right about his target than perhaps he realised. The dollar is the heart of America’s current but eroding economic hegemony, and tragetting the dollar managers of the world is a pretty astute move.
Please Note: Information published here is provided to aid your thinking and investment decisions, not lead them. You should independently decide the best place for your money, and any investment decision you make is done so at your own risk. Data included here within may already be out of date.