Speculation surrounding a possible Greek default has resurfaced

Gold managed a sustained break of $1,600 in overnight trade, reaching yet another all-time high. This is largely the result of sovereign debt fears in the Eurozone and US. Today, the US House votes on the US’s debt ceiling. Although the legislation is expected to be passed, the lack of support in the Senate means that the vote will be largely symbolic and bring the US no closer to a satisfactory resolution. This uncertainty should keep investors interested in the safe-haven advantages of Gold.

The focus will also be firmly on the emergency meeting of EU leaders this Thursday. Speculation surrounding a possible Greek default has resurfaced, with not much confidence that this week’s meeting will result in measures to avoid a default. CFTC data released last Friday (covering the week ended 12 July) reveals that silver net speculative length continued to rise, with a further 334.2 tonnes added last week. This time, the largest contributor was the 191.6 tonnes added to speculative long positions, although the 142.6 tonnes shed from speculative shorts was also considerable. Short positions now stand at 612.1 tonnes, the lowest level this year, and well below last year’s average of 1,166.9 tonnes. The sustained decline in short positions is an indication that silver is shrugging off the market’s bearish stance.

Another sign of investor interest returning is the respectable 105 tonnes of silver bought by ETFs over the past week. Currently at 14,047.6 tonnes, ETF holdings of silver seem to be making a tentative recovery from recent lows (13,939.7 tonnes), although given that these gains have only come in the past two weeks, we remain sceptical, and look for further confirmation of
sustained investor interest.

Gold support is at $1,594 and $1,584. Resistance is $1,612 and $1,618.

Comments

Post a Comment

Popular posts from this blog

Gold edges up on weaker dollar, dovish U.S. Fed policy bets

Image
 Gold edged higher on Monday, helped by a weaker dollar and expectations that the U.S. Federal Reserve will reiterate its dovish monetary policy stance this week. Spot gold was up by 0.1% at $1,943.58 per ounce. U.S. gold futures rose 0.1% to $1,950.10 per ounce. “Gold is firm on the basis that the Fed could adopt a further dovish message with respect to average inflation targeting,” said Michael Hewson, chief market analyst at CMC Markets UK. “If you want to have a policy of average inflation targeting, you’re going to have to go into detail as to how you are going to arrive at that particular outcome.” The dollar retreated on Mond ay, bolstering gold’s appeal for investors holding other currencies, ahead of the Fed’s policy decision due on Wednesday. “If inflation forecasts remain at 2% or below, this could offer gold a tailwind as the zero-yielding metal thrives in a low-interest rate environment,” said FXTM analyst Lukman Otunuga. Market participants are also wai...
Read more

For the gold price, two outcomes are possible.

Image
For the gold price, two outcomes are possible. First is a return to or near the April low ($1,277.40). Second is a drop to a lower low, $1,240 - $1,260. Yet a third possible outcome is that the June and December lows were not a double bottom and one further drop may come. I account that the least likely, and look for a low here by the end of the week, but I'm no more'n a nacheral born durnd fool from Tennessee, so what do I know?   You'd think that an institution charged with promoting the gold industry would produce reports that at least cast the best light on gold's prospects. You'd think wrong, if you're thinking about the World Gold Council. They've been negative on gold for, oh, the last 14 years or so. Today they issued a report that contained a nugget about Chinese business using physical gold as collateral for bank credit ($40 bn worth) but they managed to tease a gloomy forecast even out of this inventive monetary use. That and bad ...
Read more

The price of gold advanced as high as $1,603.40 per ounc

Image
The gold price broke out to a new all-time high above $1,600 per ounce Monday morning, rising for the eleventh consecutive trading session. The price of gold advanced as high as $1,603.40 per ounce before backing off to trade just the $1,600 level. The yellow metal gained on the back of a surge in borrowing costs for Italy, the latest European nation to see its bond market come under heavy selling pressure. The lack of a deal to raise the $14.3 trillion debt ceiling also helped boost gold prices. The eleven-day rise in the gold price is the longest winning streak since January of 1980. The gold price delivered another noteworthy performance last week, climbing 3.2% on its way to a series of fresh record highs. With Monday’s advance, the gold price extended its monthly and year-to-date gains to 6.6% and 12.5%, respectively. Last week’s two-day Congressional testimony by Chairman Ben Bernanke on the economy and monetary policy revealed that the Fed remains open to the...
Read more