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Bernanke’s Comments “Lend Support” to Gold, But Precious Metals Dip Following Strong US Jobs News

February 3rd, 2012

London Gold Market Report
from Ben Traynor
BullionVault
Friday 3 February 2012, 09:30 EST

SPOT MARKET gold prices slipped back below $1750 an ounce while stock markets rallied strongly following the release of better-than-expected US jobs figures on Friday.

The Bureau of Labor Statistics nonfarm payrolls report, published on Friday, shows that the US added a net 243,000 nonagricultural private sector jobs last month. In addition, both November and December’s nonfarm figures were revised upwards. The unemployment rate fell to 8.3%, down from 8.5% the previous month.

Silver prices also fell following the nonfarm announcement, while the US Dollar saw an immediate gain against major currencies such as the Pound, Euro and Yen.

Earlier on Friday Dollar gold prices hit their highest level in 11 weeks at $1762 per ounce, a level not seen since mid-November, following US Federal Reserve chairman Ben Bernanke’s appearance before Congress on Thursday.

“We are not seeking higher inflation,” Bernanke told the House Budget Committee, in response to comments from Republican representative Paul Ryan, who said he was “greatly concerned to hear the Fed recently announce that it would be willing to accept higher-than-desired inflation in order to focus on the [employment] side of its dual mandate.”

“We do not want higher inflation and we’re not tolerating higher inflation,” responded Bernanke, although elsewhere in his testimony he warned that “risks remain that developments in Europe or elsewhere may unfold unfavorably and could worsen economic prospects here at home.”

Fed policymakers revealed last week that a majority of them expects interest rates to remain near zero for at least the next three years. Bernanke added yesterday that the speed and aggressiveness of any future rate rises “may depend to some extent on the balance” between maintaining employment and pursuing price stability.

“These comments lent support to gold,” reckons James Steel, chief commodities analyst at HSBC in New York, noting that the Fed could opt for additional quantitative easing if progress towards full employment was inadequate.

US inflation as measured by the consumer prices index fell to 3.0% in December, down from 3.4% the previous month, but up from 1.1% 12 months earlier.

“As every day goes by, I see deflation in the things you own and inflation in the things you need,” said hedge-fund partner Kyle Bass at a meeting of the University of Texas’s $25.7 billion Investment Management Co. (Utimco) in Austin, Texas on Thursday.

“I’m against selling any of the gold,” Bass said, referring to the $1.2bn which Utimco now owns in physical gold bars after switching out of futures contracts then worth $992m in April 2011.

Over in Europe, Greece’s finance minister Evangelos Venizelos said Thursday that the European Central Bank would need to take losses on its Greek government debt holdings if Greece is to achieve the goal of reducing its debt-to-GDP ratio to 120% by 2020.

Greece is yet to agree a deal with its private creditors over the size of losses they will take. The lack of a deal throws into doubt Greece’s €130 billion second bailout, without which it will be unable to pay out on maturing bonds next month.

“Greece needs a new program, there’s no question about that, but Greece must create the conditions for it,” German finance minister Wolfgang Schaeuble said Thursday.

“We can’t pay into a bottomless pit.”

“Precious metals are enjoying some support from safe-haven demand as issues in the Eurozone once again weigh on investors’ minds,” says Marc Ground, commodities strategist at Standard Bank, who sees resistance for gold prices at $1768 per ounce.

Gold jewelers in India meantime the government to raise the duty drawback – the amount of duty exporters can claim back from the Department of Revenue – applicable to the gems and jewelry sector. The request from the Federation of Indian Exports Organisations follows the government’s decision last month to increase duty on gold bullion imports and switch to an ad valorem tax, which takes the form of a percentage of value rather than a discrete amount by weight.

Heading into the weekend, Dollar gold prices looked set to record their fifth straight weekly gain.
The gold price in Euros meantime was up 1.8% for the week by Friday lunchtime, and closing in on the four-month high touched earlier on Friday at €43,098 per kilo (€1340 an ounce).

Like those for gold, Dollar silver prices also hit their highest levels since November Friday morning, at $34.44 per ounce.

Based on London Fix prices, gold is up nearly 15% since the end of 2011, while silver is up by more than 19%. Despite silver’s rise, however, the world’s largest silver ETF, the iShares Silver Trust (ticker: SLV) has seen its holdings of bullion rise just 0.2% since the start of 2012.

By contrast, the amount of gold held to back shares in the SPDR Gold Trust (ticker: GLD), the world’s largest gold ETF has grown 1.8% over the same period, rising to its highest level since December 20 yesterday at 1277 tonnes.

Ben Traynor
BullionVault

Gold value calculator | Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

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Forex ct 3-2-12 Video News Update

February 3rd, 2012

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

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US Non-Farm Payrolls Set to Generate Heavy Volatility

February 3rd, 2012

Source: ForexYard

Today’s US Non-Farm Payrolls figure, widely considered the most significant economic indicator on the forex calendar, is set to generate heavy trading today. At the moment, analysts are predicting that the US added somewhere around 150K jobs in January. Should the final result come in below expectations the USD may come under renewed pressure to close out the week.

Economic News

USD – Negative Euro-Zone News Gives USD Temporary Boost

Fresh concerns regarding Greece’s debt negotiations sent investors to safe-haven assets during the beginning of yesterday’s trading session. The news resulted in the US dollar recouping some of its recent losses against the euro. The EUR/USD dropped to the 1.3085 level before staging a correction during the evening session. The greenback was not as fortunate against other riskier currencies. The AUD/USD range traded for much of the day, maintaining its recent bullish trend around the 1.0725 level.

Turning to today, traders can expect significant volatility in the marketplace as the US Non-Farm Employment Change figure is set to be released. Wednesday’s ADP Non-Farm figure, which is widely considered an accurate predictor of today’s news, came in below expectations and resulted in some bearish movement for the US dollar.

At the moment, analysts are predicting that the US added 150K jobs in January. Should the final figure come in significantly below that number, the greenback may extend its losses. At the same time, traders will want to note that the employment statistic is notoriously difficult to predict. A better than expected figure is entirely possible, and could result in dollar gains ahead of markets closing for the weekend.

EUR – EUR Turns Bearish Following Greek Debt Uncertainties

The euro saw bearish movement during the European session yesterday, amid fresh worries that Greece’s negotiations with its creditors may prove to me more difficult than originally thought. Additionally, worries regarding Portugal’s sovereign debt added to investor pessimism regarding the euro-zone economic recovery. As a result, the EUR/USD dropped as low as 1.3085 before staging an upward correction toward the evening session. Similarly, the EUR/JPY tumbled almost 100 pips, reaching as low 99.59 before staging a reversal.

Turning to today, the US Non-Farm Payrolls Figure is likely to dictate the direction markets take and traders can expect extreme volatility when the indicator is released at 13:30 GMT. At the moment analysts are predicting that the US added around 150K jobs in January. A worse than predicted result is likely to weigh down on the dollar and could give the euro a significant boost to close out the week. At the same time, should the employment number come in above expectations, the common currency may extend its downward movement.

JPY – JPY Maintains Upward Trend against USD

The USD/JPY stayed largely bearish throughout yesterday’s trading session, as concerns continue to grow that the Bank of Japan (BOJ) may soon intervene to limit the yen’s strength. Japan’s export based economy is negatively impacted when the yen displays bullish strength. The USD/JPY was largely range trading yesterday between 76.03 and 76.20. Analysts are warning that should the pair drop to around the 75.50 level, the BOJ may make a move.

Whether or not the pair could drop that low today, will largely be dependent on the US Non-Farm Payrolls figure, set to be released at 13:30 GMT. Traders will want to note that should the figure come in below expectations, the yen is likely to extend its bullish trend on the dollar. Whether or not that will lead to the BOJ intervening in the market place is not yet known, but traders will want to pay careful attention to the news to find out.

Crude Oil – Crude Oil Tumbles amid Increase in Risk Aversion

Crude oil continued to fall throughout the day yesterday, as fresh euro-zone debt concerns drove investors away from riskier assets. The commodity fell as low as $96.24 a barrel during the European session before staging a slight upward correction. Fresh concerns regarding both Greek and Portuguese debt contributed to the bearish direction oil took. Crude often falls when there is a bearish outlook for riskier currencies, largely because the commodity becomes less attractive to international investors.

Whether or not crude will maintain this trend today will largely be dependent on the results of the US Non-Farm Payrolls figure, set to be released at 13:30 GMT. A worse than expected US jobs figure may weigh down on the dollar ahead of markets closing for the week. In such a case, the euro may see a boost which would likely result in a bullish reversal for oil.

Technical News

EUR/USD

After steadily increasing in recent days, technical indicators are now showing that this pair may see a downward correction in the near future. The daily chart’s Williams Percent Range is currently at the -10 level, while the Relative Strength Index has drifted above 70. Going short may be the preferred strategy today.

GBP/USD

Technical indicators are showing that this pair is in overbought territory and could see a bearish correction shortly. A bearish cross has formed on the daily chart’s Stochastic Slow, while the Relative Strength Index on the same chart is well into the overbought zone. Going short could prove to be the wise choice.

USD/JPY

While a bullish cross has formed on the daily chart’s Stochastic Slow, indicating impending upward movement, the Relative Strength Index on the same chart is in neutral territory. Traders may want to take a wait and see approach for this pair, as a clearer trend may present itself later on.

USD/CHF

Technical indicators on the daily chart show this pair trading in oversold territory, which is typically a sign of impending upward movement. The Williams Percent Range has drifted below the -90 level, while the Relative Strength Index is at 20. Opening long positions may be the wise choice.

The Wild Card

AUD/NZD

Most technical indicators show this pair trading in the oversold zone, typically a sign that upward movement could occur in the near future. A bullish cross has formed on the daily chart’s Stochastic Slow, while the Relative Strength Index on the same chart is hovering around the 30 level. forex Forex traders may want to go long in their positions today, ahead of a possible upward breach.

Forex Market Analysis provided by ForexYard.

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

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Chinese & Indian Gold Demand Rising as Zero Rates “Distort” Investment Markets, “May Kill Credit”

February 2nd, 2012

London Gold Market Report
from Adrian Ash
BullionVault
Thurs 2 Feb., 09:15 EST

The WHOLESALE-MARKET gold price slipped 0.5% from a new 8-week high in London Thursday morning, while global stock markets stalled after a 3-day rise and commodities also edged back.

The Euro fell from $1.32 on the forex market for the third time this week after chief finance minister Jean-Claude Juncker said new proposals for stemming the currency zone’s debt crisis – agreed at a summit on Monday – were “largely insufficient”.

The gold price in Euros touched €43,900 per kilo, a level breached only five times during the surge to all-time record highs of summer last year.

Beijing meantime said China’s full-year gold mining output in 2011 – all of which was bought domestically, since exports are banned – hit a record 361 tonnes, a rise of 5.9% on 2010.

China’s 2011 gold imports may have reached 490 tonnes, perhaps twice the 2010 level, according to Credit Suisse.

So far in 2012, imports of Gold Bullion to India – the world’s No.1 consumer – have been “significantly above average” reports UBS strategist Edel Tully, despite last month’s doubling of import duties.

The central bank of Vietnam said today it plans to “mobilize” private gold holdings via “credit institutions” which would effectively replace the private operations banned last year.

“For now, gold may well remain volatile,” says Dirk Wiedmann, head of investments at Rothschild Wealth Management, now running some €12 billion ($15.7bn) in client funds.

“[But] it is increasingly attractive as the only truly hard currency…[Our] large positions in gold seek to preserve and grow the real value of our clients’ wealth.”

“We can’t put $100 trillion of credit in a system-wide mattress,” says Bill Gross, founder and co-manager of the giant Pimco bond-funds group. “But [savers and creditors] can move in that direction by delevering and refusing to extend maturities and duration.”

Because interest rates cannot go down from zero, bond prices have little room to rise, says Gross, and so “Zero-bound money may kill as opposed to create credit.

“It may, as well, induce inflationary distortions that give a rise to commodities and gold as store of value alternatives when there is little value left in paper.”

January’s sharp rise in global stock markets, however, means that “Strategists at the biggest banks are capitulating on their bearish forecasts,” reports Bloomberg today, citing a sharp reversal in predictions and recommendations after last month’s 7% jump in emerging-economy equities.

“We have been increasing exposure to risk assets over the past six weeks,” says Andrew Cole, director of strategic policy for Baring Asset Management’s £9 billion multi-asset portfolios.

“We see a self-help cycle materialising” thanks to the European Central Bank’s long-term banking loans, Cole tells Investment Week after buying £350m in Italian government bonds.

“Italy is not going to go bust and this is our way of getting exposure to the improved liquidity.”

“We believe that the ‘risk off’ attitude of investors which took hold in the second-half of 2011 is largely over,” agrees Angelos Demaskos, chief investment officer of the £35.6 million Junior Gold Fund ($56m) at Sector Investment Managers in London to Proactive Investors earlier this week.

Anyone who “wanted to sell” junior gold mining stocks has already sold, Demaskos believes, “and there is a very strong possibility they will be re-rated to catch up with the underlying commodity.”

Over the last 12 months, Sector Investment’s Junior Gold Fund has lost 9.0% of its value, according to TrustNet.

The physical gold price has risen 29.7% in British Pound terms.

Silver bullion has risen 11.9% over the last year.

“It’s been a good month” for US silver coin demand, says Michael Kramer of authorized US Mint distributor Manfra, Tordella & Brookes, quoted by Kitco News and pointing to January as the second-strongest monthly sales of silver bullion Eagle coins on record.

Demand was “greatly” helped by the launch of new 2012 coins however, Kramer added., because “People always want the brand-new coins, so January sales are always pretty good.”

Adrian Ash
BullionVault

Gold price chart, no delay | Buy gold online at live prices

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

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How Does the Value of the U.S. Dollar Fit Into the Big Picture for the Economy?

February 1st, 2012

Robert Prechter discusses his views on the credit crisis and the U.S. dollar

By Elliott Wave International

More credit is denominated in U.S. dollars than any other currency. What does this mean for the value of the dollar as the credit crisis continues its strangle-hold on the world economies?

Enjoy this video clip of Bob Prechter from an October interview with The Mind of Money host Douglass Lodmell, in which Bob discusses the debt implosion and the value of the U.S. dollar.

You can watch Prechter’s full 45-minute interview here — no sign up required!

Watch the full 45-minute interview FREEGet even more valuable insights as Mind of Money host Douglass Lodmell interviews Elliott Wave International’s President, Robert Prechter, about how to keep your money safe, the deflation versus inflation debate, and many more topics that are critical to your financial future.Start watching the free 45-minute interview now — no sign up required!

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Gold, Stocks and the Euro All Gain in “Risk Asset Recovery” as Positive Manufacturing Data “Confirms China’s Soft Landing”

February 1st, 2012

London Gold Market Report
from Ben Traynor
BullionVault
Wednesday 1 February 2012, 08:30 EST

THE U.S. DOLLAR cost of buying gold climbed to $1750 an ounce Wednesday morning London time – gold’s highest level since early December – while commodity prices also ticked higher and stock markets surged following the release of better-than-expected manufacturing data from several major economies.

Prices for buying silver rallied to $34.01 – though they remained below yesterday’s high.

US Treasury bond prices fell meantime, while the Euro rallied 1.3% against the Dollar.

“Buyers have returned to the Euro, which is helping the situation in gold,” says Ole Hansen, senior manager at Saxo Bank.

“[Gold] had a bit of lackluster profit-taking yesterday but didn’t break anything important on the downside, which helped confirm that being long is back in vogue.”

“I think that going forward, gold is still going to be looking at the US and the Euro zone for direction,” reckons Phillip Futures analyst Ong Yi Ling in Singapore.

The wholesale market price of buying gold in Euros meantime rose to its highest level since September – hitting €42,864 per kilo (€1333 per ounce) – before dropping ahead of US open.

Based on month-end PM London Fix prices, January saw gold’s biggest calendar month gain in Dollar terms since September 1999. The Dollars-per-ounce price of buying gold was fixed at $1744 yesterday – 13.9% up on the last PM Fix of 2011.

January also marked gold’s best start to a year since 1980, Amanda Cooper at Reuters reports.
Stock markets meantime recorded their best January since 1994, according to Bloomberg, which cites a 5.8% rise for the MSCI All-Country World Index if dividends are included.

“Three things have been behind the recovery in risk assets,” says Mike Ryan, chief investment strategist at UBS Wealth Management Americas in New York.

“Progress on a fiscal compact in Europe, better-than- expected economic data and more accommodative central-bank policies.”

Stock markets gained strongly Wednesday morning too – with the FTSE 100 in London up 1.4% and Germany’s DAX up 2.4% by lunchtime – following news of worldwide manufacturing growth.

China’s manufacturing sector grew in January, according to the official purchasing managers index release, which rose to 50.5 from 50.3 last month (a figure above 50 indicates expansion).

“Today’s data further confirmed a soft-landing story for China,” reckons Ken Peng, economist at BNP Paribas in Beijing.

“However, consumer demand may weaken after holiday effects disappear.”

“New export orders declined,” points out Wei Yao, China economist at Societe Generale.

“Together with a depressed level of backlog orders…the boost in total orders looks temporary, and suggests that manufacturers are not very optimistic about the near-term outlook. Given today’s report, we think year on year export and import growth will prove to be barely positive in January.”

China’s PMI figure “was expansionary, but no so expansionary that we anticipate [monetary] tightening,” says one gold dealer here in London.

“There will be a power transition in Beijing this year,” adds a dealer in Hong Kong.

“I expect maintaining stability at all cost is what this government is going to do.”

Britain’s manufacturing sector also expanded in January, with the PMI coming in at 52.1 – having been below 50 the previous month. Similarly, German manufacturing resumed growth last month, according to its January PMI, which was reported today as 51.0.

Eurozone manufacturing as a whole, however, continued to shrink, albeit at a slower rate, with the PMI rising from 46.9 in December to 48.8 last month.

Similar manufacturing data for the US are released later on Wednesday. The latest ADP Employment Report meantime shows the US added 170,000 private sector jobs in January – down from around 300,000 the previous month. The official nonfarm payrolls data are due to be released by the US Bureau of Labor Statistics on Friday.

Greece’s private sector creditors may be offered a ‘sweetener’ in the form of a bond whose coupon is tied to future economic growth, Bloomberg reports. Negotiations – which Greek finance minister Evangelos Venizelos said yesterday are “one step” from success – stalled last week after parties could not agree on the size of the coupon on new bonds for which existing ones would be swapped.

The government in India – the world’s largest source of demand for buying gold– announced Wednesday it is raising the base import price of gold by 5.7% to $556 per 10 grams. Silver’s base import price will rise 12% to $1067 per kilo. The base import price is the price used to calculate the import duty.

The move follows last month’s switch from discrete to ad valorem taxation, a move which also saw the effective duty on gold almost doubled.

The higher import duties have had a “definite impact” on demand for buying gold in India, according to Harshad Ajmera, proprietor of JJ Gold House in Kolkata.

Ben Traynor
BullionVault

Gold value calculator | Buy gold online at live prices

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EUR Bullish After EU Bailout-Fund Agreement

February 1st, 2012

Source: ForexYard

The euro staged a small but significant upward correction during European trading yesterday, following an agreement among euro-zone leaders to set up a permanent bailout fund. The news briefly lifted the EUR/USD above the 1.3200 level, but the pair was not able to sustain its bullish momentum and began falling shortly after. Today, traders can expect heavy volatility in the marketplace ahead of the US ADP Non-Farm Employment Change at 13:15 GMT. A better than expected figure could help the USD in afternoon trading.

Economic News

USD – USD Takes Losses amid Positive Euro-Zone News

The US dollar slipped against its main currency rivals throughout the day yesterday, following positive euro-zone news that led to risk taking in the marketplace. The EUR/USD briefly drifted above the 1.3200 level, while the GBP/USD approached 1.5800 before staging a slight downward correction. Against the safe haven Japanese yen, the dollar was relatively unchanged after hitting a three-month low, which prompted fears that the Bank of Japan would intervene in the currency markets to limit the JPY’s growth.

Turning to today, a batch of significant US economic indicators are forecasted to generate market volatility during European trading. Particular attention should be given to the ADP Non-Farm Employment Change figure. The ADP figure is a precursor to Friday’s all important Non-Farm Employment Change. It is widely considered an accurate indicator of the current employment situation in the US and traders should be aware that heavy market movement will likely take place following its release. Should the figure come in above expectations, the USD could see a boost as a result.

EUR – EUR Stages Recovery Following EU News

News that euro-zone leaders came to an agreement to set up a permanent bailout fund lifted the euro throughout yesterday’s trading session. While Greece still has yet to come to an agreement with its creditors regarding a debt-swap deal, investors responded to the EU news by shifting their funds away from safe-havens to riskier assets. The EUR/USD briefly crosses the 1.3200 line as a result, while the EUR/JPY shot up over 50 pips before staging a downward correction.

Analysts are still maintaining that any gains the euro makes in the coming days are likely to be temporary. Even if Greece finally announces a debt-swap deal, as it is widely expected to do by the end of the week, optimism in the euro-zone economic recovery is likely to be short lived. Signs that Portugal is close to defaulting on its debt are one several indications that the euro-zone crises is far from over.

Today, traders will want to pay attention to the US ADP Non-Farm Employment Change figure, as it is likely to determine the direction the euro takes in afternoon trading. Last week, negative US news led to major gains for the common currency. Should today’s news come in below forecasts, the euro may be able to extend its bullish trend.

JPY – JPY Maintains Gains against US Dollar

The Japanese yen remained close to a three-month high against the US dollar throughout yesterday’s trading day. The JPY’s prolonged bullish trend prompted fears among traders that the Bank of Japan (BOJ) may intervene in the currency markets to limit the yen’s growth. A strong yen tends to have an adverse effect on Japan’s export heavy economy, and the BOJ has taken steps a number of times in the past to reduce the currency’s value.

Turning to today, the USD may be able to recoup some of its recent losses against the yen, providing a batch of US news comes in at or above expectations. Both the US ADP Non-Farm Employment Change and ISM Manufacturing PMI are likely to generate heavy volatility. Traders will want to pay attention to the results of both events, as they may set the trend for the USD/JPY for the next several days.

Crude Oil – Oil Soars Above $100 a Barrel

Positive euro-zone news generated a significant amount of risk taking yesterday, giving crude oil a healthy boost throughout the day. The commodity shot up over 150 pips, to well above the psychologically significant $100 a barrel level. Riskier commodities like crude oil often become more expensive when the euro goes up in value.

Today, traders will want to note the results of a batch of US news that could set the trend for oil going into the rest of the week. The US ADP Non-Farm Employment Change figure, set to be released at 13:15, is likely to generate the most volatility. Should the dollar capitalize on the results of the employment figure, crude may see a downward reversal as a result.

Technical News

EUR/USD

According to technical indicators on the daily chart, this pair is in overbought territory and may see a downward correction in the near future. A bearish cross has formed on the Stochastic Slow, while the Williams Percent Range is currently at the -10 level. Traders may want to go short in their positions ahead of the downward breach.

GBP/USD

Technical indicators are showing that this pair may have hit a significant resistance point and could see a correction in the near future. The daily chart’s Relative Strength Index is in well into the overbought zone, while a bearish cross has formed on the Stochastic Slow. Going short may prove to be the wise choice.

USD/JPY

Technical indicators on both the daily and weekly charts are showing that this pair is oversold and may see an upward correction in the near future. The daily chart’s MACD/OsMA has formed a bullish cross, while the weekly chart’s Relative Strength Index is hovering close to the oversold zone. Traders may want to go long in their positions.

USD/CHF

Most technical indicators show this pair trading in the oversold zone, meaning that an upward correction could take place in the near future. The Williams Percent Range on the daily chart is at the -90 level, while the Relative Strength Index on the same chart has dropped to the 15 level. Going long may be the preferred strategy today.

The Wild Card

CAD/CHF

Technical indicators on the daily chart are showing that this pair is oversold and may see an upward correction in the near future. The Stochastic Slow has formed a bullish cross, while the Relative Strength Index has drifted into the oversold territory. Forex traders may want to go long in their positions ahead of an upward breach.

Forex Market Analysis provided by ForexYard.

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Gold Set for Biggest Monthly Gain of C21st, But Ends January with “Lackluster” Physical Interest in Asia

January 31st, 2012

London Gold Market Report
from Ben Traynor
BullionVault
Tuesday 31 January 2012, 09:00 EST

U.S. DOLLAR gold bullion prices looked set to record their largest calendar month gain this century by Tuesday lunchtime in London.

Gold prices hit $1745 per ounce – just less than 14% up on the Dollar gold bullion price set at the last London Fix of 2011.

By this measure, January 2012 looked set to record the fourth-largest calendar month gain in the last three decades, and the biggest since September 1999, the month that saw the signing of the Central Bank Gold Agreement, which limited the sales of gold bullion by signatory central banks.

Stocks and commodities also gained Tuesday, while government bond prices dipped.

“In overnight trade in Asia, we continued to see lackluster physical interest,” says Marc Ground, commodities strategist at Standard Bank.

“[There was] even some scrap gold and silver coming to market from Japanese recyclers…nevertheless, prices held steady.”

Physical volumes on the Shanghai Gold Exchange Tuesday were down 28% on the previous day.
The first day’s trading after Lunar New Year saw “strong physical demand” on Monday, according to one gold bullion dealer in Hong Kong.

Silver bullion prices meantime hovered around $33.80 per ounce – 21.2% up on the start of January.

Industrial manufacturers meantime are set to use over 15,000 tonnes of silver in 2012 – 2.5% more than last year – according to estimates by Barclays Capital. Morgan Stanley meantime reckons investors may invest in 2000 tonnes of silver bullion via exchange traded vehicles – following net selling by such investors of 1300 tonnes last year.

“Silver got hammered [following last April's peak],” says Dan Smith, head of metals research at Standard Chartered.

“Now we’re into a phase where it will do quite well…Appeal comes from its widespread use in both industry and investment. I think it’s relatively cheap.”

“The short-term investment argument is not entirely convincing,” counters David Jollie, strategic analyst at Mitsui Precious Metals in London, citing “weak industrial demand” in places like China.

Chinese silver imports in December were 36% down on their average for the last two years, customs data cited by newswire Bloomberg show.

Here in the UK, seasonally adjusted M4, the broadest money supply measure, fell 1.4% in December – its largest one month drop since the Bank of England began recording the data in 1982. The year-on-year fall was 2.5%.

Net consumer credit in November meantime fell by £377 million – the first net drop since last January and the biggest monthly fall since the data series began in 1993.

“There is clearly a risk that credit constraints may hinder the reallocation of resources required to rebalance the economy,” Bank of England governor Mervyn King said in a speech last week, adding that “there is scope for interest rates to remain low, and, if necessary, for further asset purchases [to facilitate quantitative easing].”

Eurozone unemployment meantime hit a record high last month at 16.5 million people – with the unemployment rate at 10.4% – according to official figures published Tuesday by Eurostat.

“In many cases you find firms continuing to delay investment projects,” notes Citigroup economist Guillaume Menuet.

“For those that are still making profits, hiring is being frozen, and for those which are under pressure to hit results or losing money, job losses are becoming the only solution that they have.”

Elsewhere in Europe, banks are preparing to borrow at least €1 trillion when the European Central Bank holds its 3-Year longer term refinancing operation next month – more than twice the amount borrowed at December’s 3-Year LTRO.

Greece meantime is hoping to conclude a deal with its private sector creditors by the end of the week, Greek prime minister Lucas Papademos said Tuesday. There remained however no agreement among European leaders over what to do about the deterioration is Greece’s fiscal position.

“Greece’s debt sustainability is especially bad,” German chancellor Angela Merkel said Monday.

“You have to find a way through more action by the Greek government, more contributions by private creditors, for example, in order to close this gap.”

At yesterday’s summit leaders agreed to accelerate the implementation of the €500 billion European Stability Mechanism, the Eurozone’s permanent bailout fund.

There was also endorsement of proposed new deficit rules – although a German suggestion that the EU appoint a budget commissioner to oversee Greece’s finance appears not to be receiving wider support.

“Surveillance of Greece’s progress is normal,” French president Nicolas Sarkozy said, “but there was never any question of putting Greece under guardianship.”

Over in the US, the Commodity Futures Trading Commission, which regulates gold futures and options trading on the New York Comex, has said it is considering new rules aimed at firms using automated and high-frequency trading systems as part of its efforts to implement the Dodd-Frank legislation on financial services.

Venezuela has completed the repatriation of 160 tonnes of gold bullion – around three quarters of its total reserves that were held in US, European and Canadian banks – newswire Dow Jones reports.

“Venezuela’s gold is now in the hands of Venezuelans, secured by Venezuelans and at the service of all Venezuelans,” said Venezuela’s central bank head Nelson Merentes.

Gold bullion makes up 71% of Venezuela’s total foreign reserves, according to figures from the World Gold Council.

Ben Traynor
BullionVault

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31-1-12 Forex CT Video News Update & Outlook

January 31st, 2012

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Currency Futures: Forex Speculators raise Euro bearish bets. Aussie, Kiwi & Mexican Peso bets rise

January 30th, 2012

By CountingPips.com

The latest Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that large futures speculators continued to pile into bets against the European common currency for a fifth consecutive week.

Non-commercial futures traders, usually hedge funds and large speculators, added to their short positions for the euro while trimming short positions in the British pound sterling, Swiss franc and the Canadian dollar. The Australian dollar, New Zealand dollar and the Mexican peso saw higher long positions directly against the US dollar while the Japanese yen decreased for a second consecutive week.

Individual Currencies:

EuroFX: Currency speculators added more to their Euro short positions for a fifth week as of January 24th and raised their short bets to a new record high once again. Euro short positions totaled 171,347 net short contracts from the previous week’s total of 160,030 net short contracts as speculator sentiment for the common European currency for futures speculators remained dismal last week.

The COT report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity. Each currency contract is a quote for that currency directly against the U.S. dollar, where as a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and net long position expect that currency to rise versus the dollar. The graphs overlay the forex spot closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.

GBP: British pound sterling positions showed improvement following four consecutive weeks of declines as of January 24th. British pound positions saw a total of 31,361 short positions on January 24th following a total of 41,634 net short positions registered on January 17th.

JPY: The Japanese yen net long speculative contracts declined lower for a second consecutive week, according to the latest data on January 24th. Yen long positions decreased to a total of 44,367 net long contracts reported on January 24th following a total of 58,862 net long contracts that were reported on January 17th. Yen speculative positions on January 10th had registered their highest level in over a year surpassing the August 2nd level when long positions leveled at 58,833 contracts.

CHF: Swiss franc speculators slightly trimmed their short bets against the Swiss currency as of January 24th although positions have barely changed in the past four weeks. Speculator positions for the Swiss currency futures numbered a total of 12,514 net short contracts on January 24th following a total of 12,822 net short contracts as of January 17th. Swiss contracts have now been on the short side by more than 10,000 contracts for five consecutive weeks.

CAD: Canadian dollar positions improved after declining for three consecutive weeks. Canadian dollar positions improved to a total of 18,909 net short contracts as of January 24th following a total of 28,730 short contracts reported on January 17th. CAD positions on January 17th marked their lowest level in over a year.

AUD: The Australian dollar long positions continued higher for a fifth consecutive week as of January 24th. Australian dollar positions increased to a total net amount of 69,486 long contracts on January 24th after totaling 54,306 net long contracts reported as of January 17th. The AUD speculative positions are at their highest level since August 2nd when Australian dollar long positions totaled 75,598.

NZD: New Zealand dollar futures speculator positions rose higher and increased for a fifth consecutive week through January 24th. NZD contracts advanced to a total of 12,932 net long contracts as of January 24th following a total of 9,455 net long contracts on January 17th. NZD positions have now risen for five straight weeks from the December 20th low standing (which was the lowest position since March 29th when positions equaled 239 long contracts) to the highest level since September 20th.

MXN: Mexican peso speculative contracts improved for a third consecutive week and crossed back over to a positive long position against the US dollar. Peso long positions numbered a total of 7,418 net long speculative positions as of January 24th following a total of 17,328 net short contracts that were reported on January 17th. Peso contracts are now in a positive long position for the first time since September 6th win contracts were positive by 13,246.

COT Currency Data Summary as of January 24, 2012
Large Speculators Net Positions vs. the US Dollar

EUR -171347
GBP -31361
JPY +44367
CHF -12514
CAD -18909
AUD +69486
NZD +12932
MXN +7418

Other COT Trading Resources:

Trading Forex Using the COT Report

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30-1-12 Forex CT Fundamental Update & Outlook

January 30th, 2012

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USD Bearish Ahead of Heavy Trading Week

January 30th, 2012

Source: ForexYard

The US dollar closed last week on a bearish note, as it took significant losses against most of its main currency rivals, including the euro and Japanese yen. The dollar began to decline during the middle of the week, following an announcement from the Fed saying that record low US interest rates would likely remain for the next several years. A softer than expected US Advanced GDP figure on Friday only caused the currency to drop further. This week, all eyes will be on the US Non-Farm Payrolls figure. Should the figure come in below expectations, the dollar will likely extend its bearish trend.

Economic News

USD – USD Looks to Reverse Last Week’s Losses

Last week’s announcement by the Fed that US interest rates would likely remain at their current, near-zero levels until 2014 sent the USD tumbling against virtually all of its main currency rivals. The announcement was followed up by a worse than expected US Advance GDP figure, which added to the gloomy outlook investors have regarding the US economic recovery. The dollar closed out the week above the 1.3200 level against the euro, while it gave back virtually all of the gains made against the yen several days before.

The greenback will have ample opportunities to recoup its earlier losses this week, as a series of significant US economic indicators are scheduled to be released. While all eyes will most certainly be on Friday’s Non-Farm Employment Change figure, traders will also want to note the results of Wednesday’s ADP Non-Farm Employment Change and ISM Manufacturing PMI. A solid figure from either of the two indicators may help the USD in mid-week trading.

Turning to today, the direction markets take will likely be determined by euro-zone news. Specifically, investors will be eyeing Greece to see if it reaches a debt-swap deal with its creditors. Should such a deal be announced, riskier currencies may see a boost which would likely mean that the dollar will extend its losses.

EUR – Possible Greece Debt Deal May Boost EUR

Negative economic news out of the US last week briefly overshadowed the euro-zone debt crisis and led to significant gains for the euro to close out the week. A worse than expected US Advance GDP figure sent the EUR/USD above the 1.3200 level on Friday. Whether or not the pair will continue to rise this week depends on a number of economic indicators which are sure to generate plenty of market volatility in the coming days.

Today, traders will want to watch out for any announcements out of the euro-zone concerning a Greek debt-swap deal. Greece has been in negotiations with its creditors for some time now regarding its debt. A successful deal will likely give the euro a boost against its main currency rivals. At the same time, fears that Portugal could also default on its debt in the near future could limit the common currency’s upward momentum. Analysts are quick to warn that while the euro has turned bullish in trading as of late, much still has to be done before a euro-zone debt crisis is resolved. Any negative European news could bring the currency tumbling down.

JPY – Yen May Be Able to Extend Gains This Week

Despite the significant losses the Japanese yen took during mid-week trading, the currency was able to stage a recovery on Thursday and Friday following negative US news which sent trader to the safe-haven currency. The USD/JPY tumbled over 150 pips over the course of two days to close out the week at the 76.66 level. Against the euro the yen had more mixed results, but was still able to close Friday’s session at 101.39. The EUR/JPY was down some 75 pips from its weekly high when markets closed for the weekend.

Turning to this week, yen values will likely be determined by euro-zone and US news. Today, the yen could take some losses should the details of a Greek debt deal be announced. At the same time, traders will want to pay attention to any negative news out of Portugal which could limit the euro’s upward momentum. Later in the week, significant US news is scheduled to be released. Any indicator which causes investors to doubt the US economic recovery is likely to boost the yen.

Crude Oil – Crude Closes Out Week below $100 Level

Despite the boost riskier currencies like the euro saw toward the end of last week, crude oil saw mixed trading during Friday’s session and eventually closed below the $100 a barrel level. Analysts attributed the downward movement to the news that any EU embargo on Iranian oil will likely not go into effect for several months. The news calmed supply side fears among investors which eventually brought the commodity down.

This week, oil traders will want to pay attention to both euro-zone and US news. Should the euro maintain its bullish momentum, oil will likely become more attractive to international investors and prices could go up as a result. At the same time, any better than expected US news could lead to the opposite affect and turn oil bearish.

Technical News

EUR/USD

GBP/USD

USD/JPY

USD/CHF

The Wild Card

GBP/CHF

The 8-hour chart’s Stochastic Slow has formed a bullish cross, indicating that upward movement may occur in the near future. This theory is supported by the daily chart’s Williams Percent Range, which is currently at the -90 level. This may be a good opportunity for forex traders to open long positions ahead of a possible upward correction.

Forex Market Analysis provided by ForexYard.

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EUR/JPY Outlook- Jan 29, 2012

January 29th, 2012

EUR/USD broke the resistance mentioned last weekend and quoted above and then moved further up as we had mentioned towards 1.3230. The currency pair went as high as 1.3233 or a few pips below the Fibonacci 38.2% retracement of the downward move from October 27th to the recent bottom of January 15th.

The strong upward correction and the break above the upper edge of the daily Ichimoku cloud indicate that we can expect some more upward correction in the coming days. The development in Europe about the debt crisis do not really add any strong positive outlook for Euro in the mid-term.

eur usd daily chart

On the upside a break over the Fibonacci 38.2% retracement, as mentioned above, i.e. 1.3244 and then 1.3260 is important. A firm break above this zone should take EURUSD towards the resistance zone of 1.3430 to 1.3485 resistance zone. Please note that 1.3434 represents the Fibonacci 50% retracement of the above mentioned move. Not only this but the range of 1.3430 to 1.3550 had proved to be a very strong resistance zone during November 30th to December 9th, 2011. The psychological resistance of 1.3500 would also come into picture at those levels. However a break above this will bring up the possibilities of a test to 1.3620.

Please note that we are considering the recent move as only a correction/consolidation during the overall downtrend and overall we would expect a fall from one of these resistance levels. On the downside the important support levels would be 1.3040 and then 1.2960. A firm break of these support levels and then 1.2930 should take the euro-dollar pair to retest the recent 1.2626/1.2624 bottom. The support levels mentioned are based on 55-day and 22-day EMA as well as the supports of Tenkan and Kijun-Sen of the daily Ichimoku cloud.

You may also check daily technical eur/usd analysis and the weekend eurusd forecast at ForexAbode.com.

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USD/CHF Outlook – Jan 29th, 2012

January 29th, 2012

USD/CHF broke the supports mentioned during the last weekends and quoted above and even broke below 0.9200 to touch 0.9114 and to close with strong short-term bearish sentiments at 0.9128.

usdchf daily chart

The strong drop and price action of the last week suggest that we can expect some more downward correction towards the next support level of 0.9064/0.9065. This level represents the support level during the beginning of December 2011 and is also near the Fibonacci 50% retracement of the upward move during October 27th, 2011 to January 8th, 2012. On the downside a firm break of this and then the psychological level of 0.9000 may take USDCHF towards 0.8950 or the Fibonacci 61.2% retracement level of the above mentioned upward move. Our mid-term outlook will start changing to bearish only with a firm break of this and then 0.8800 support to expect any move towards the low of 0.8567.

On the upside, a break over 0.9340 will again start changing our focus towards upside and this will get confirmed with a firm break over 0.9415 to expect a retest of 0.9596.

You may also check daily technical usd/chf analysis and the weekend usdchf forecast at ForexAbode.com.

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Credit Crisis: Are We Set Up for The Perfect Storm?

January 27th, 2012

Robert Prechter discusses what’s backing your dollars

By Elliott Wave International

In this video clip, taken from Robert Prechter’s interview with The Mind of Money, Prechter and host Douglass Lodmell discuss “real” money vs the FIAT money system, and what is backing your dollars under our current system. Enjoy this 4-minute clip and then watch Prechter’s full 45-minute interview here >>

Watch the full 45-minute interview FREE

Get even more valuable insights as Mind of Money host Douglass Lodmell interviews Elliott Wave International’s President, Robert Prechter, about how to keep your money safe, the deflation versus inflation debate, and many more topics that are critical to your financial future.

Start watching the free 45-minute interview now >>

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Gold “Has Foundation to Build Next Move Higher” Following FOMC “Catalyst”, Slow Physical Demand “Explains Gold’s Resistance at $1730″

January 27th, 2012

London Gold Market Report
from Ben Traynor
BullionVault
Friday 27 January 2012, 08:30 EST

WHOLESALE MARKET gold prices were headed for their biggest one-week rise since the start of December Friday lunchtime in London, climbing back through $1720 an ounce – a weekly gain of over 3%.

Silver prices meantime hovered around $33.60 per ounce – 4.2% up on last week’s close – while other stocks and commodities were broadly flat and US Treasury bond prices slipped.

A day earlier, gold prices hit a 7-week high at $1730 per ounce before easing in Friday’s Asian session.

“Lack of physical demand partly explains the inability of gold to make a sustained move beyond the $1730 level,” says Standard bank commodities strategist Marc Ground, citing this week’s Chinese Lunar New Year holiday as impacting demand from China, Singapore, Malaysia and Indonesia.

“[But] while slowing physical demand might provide some resistance during price rallies, we do not feel that it would be the cause of prices moving significantly lower.”

“The [physical] market has been like a yo-yo,” one Singapore dealer tells newswire Reuters.
“I think it’s a good time to buy gold…but clients are all cautious. They are doing enough to roll their money but keeping it all for the possibility of buying back.”

“Maybe it’s better to wait until Monday,” reckons another Singapore dealer.

“The Chinese market reopens and [we will] see whether they will buy some more gold or they will take profits.”

Based on PM London Fix prices, gold by Friday lunchtime looked set for its biggest weekly gain since the week ended December 2 last year.

That week saw gold’s biggest single-day Fix-to-Fix gain of recent months, when gold prices rose 2.5% on 30 November last year. Between that day’s AM and PM Fix, six of the world’s central banks announced a co-ordinated move lower the cost of Dollar funding for to the banking system.

This week meantime saw the Federal Reserve’s Federal Open Market Committee begin publishing members’ interest rate projections on Wednesday. The majority of FOMC members expect rates to remain at or below 1% until at least the end of 2014.

“The market attitude towards gold for most of January could be summed up in two words: cautious optimism,” says the latest precious metals note from UBS.

“Investors were reluctant to add to positions aggressively as memories of the disappointment in Q4 lingered…A fresh catalyst was needed and we think the FOMC outcome on Wednesday fit the bill.

More accommodative policy is a very good foundation for gold to build on the next move higher.”
Between Wednesday’s London PM Fix and Thursday’s AM Fix – during which time the Fed made its announcement – gold prices gained 3.8%. Notwithstanding the New Year break, this was the biggest Fix-to-Fix gain since September 27.

That rise in gold prices coincided with reports that European policymakers were preparing a move to recapitalize the continent’s banks – though the reported proposals were not adopted.

European leaders meantime are “just about to close a deal on private sector involvement between the Greek government and the private-sector community,” European commissioner for economic and monetary affairs Olli Rehn said Friday, speaking at the World Economic Forum in Davos, Switzerland.

A Greek deal would pave the way for Greece’s second bailout, agreed last October and worth €130 billion – without which Greece will not be able to repay €14.5 billion of maturing debt on March 20.

Iran – which was earlier this week hit by fresh sanctions on oil, diamond and gold dealing – has said that it may immediately halt its oil exports to Europe to pre-empt a European Union ban due to come into force July 1. Greece is thought to import around one third of its oil from Iran.

Two weeks after ratings agency Standard & Poor’s downgraded them to junk status, yields on 10-Yeat Portuguese government bonds hit their highest levels since the crisis began Friday morning when they traded at 15.4% – almost double the yield on equivalent Irish debt.

Portugal’s 5-Year bond yields breached 20%.

“It makes it impossible for Portugal to access debt markets in 2013,” says JPMorgan rate strategist Nikolaos Panigirtzoglou.

“It’s a country that still relies on the official sector in terms of financing its current account deficit and repayments and this makes it certain that we’re going to get a second bailout for Portugal later this year.”

“The market is asking whether Portugal is really just like Greece,” adds Richard Batty, strategy director at Standard Life Investments.

A survey published this morning by British free newspaper Metro finds that 68% of British people believe the Euro will collapse.

French bank Societe Generale’s latest Hedge Fund Watch also finds that hedge funds are shorting the single currency “like never before”, the Financial Times Alphaville blog reports.

The Euro however rallied against the Dollar Friday morning, breaking back through $1.31.

Euro gold prices were flat Friday morning, holding above €42150 per kilo (€1310 per ounce) – still a 1.7% gain for the week.

Ben Traynor
BullionVault

Gold value calculator | Buy gold online at live prices

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Forex CT 27-1-12 Video News Update & Outlook

January 27th, 2012

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“Fed Euphoria” Sees Gold Touch 7-Week High as 0% Rates Promised ‘Til 2014

January 26th, 2012

London Gold Market Report
from Adrian Ash
BullionVault
Thurs 26 Jan., 08:30 EST

INVESTMENT DEMAND to buy gold continued to push wholesale prices higher Thursday morning in London, after the US Federal Reserve vowed to keep Dollar interest rates at zero until at least 2014 – one year later than previously promised.

The global market’s AM Gold Fix here in London was set at $1713 per ounce, more than 3.8% higher from Wednesday afternoon and the highest level since Dec. 8th.

The most-active US gold futures contract yesterday saw its heaviest volume in six weeks according to Amanda Cooper at Reuters, while investors wanting to buy gold exposure added 9 tonnes to the holdings of the New York-listed SPDR Gold Trust, whose assets rose to $69.3 billion by value.

“People are still very under-invested in gold, and so there is a huge scope of that increasing,” reckons UniCredit analyst Jochen Hitzfeld in Munich, speaking to Bloomberg.

“The [Fed's] announcement prompted investors to buy gold as a hedge against inflation,” says the Associated Press, “which investors fear could be a result of the its extended low-interest rate policy.”

Five-year US Treasury yields touched a new record low of 0.75% last night. US consumer-price inflation was last pegged at 3.0% annually.

All other tradable assets also pushed higher Thursday morning, sending Japanese, German and UK government bond yields lower as crude oil added 1%, copper rose 1.8%, and the MSCI index of emerging economy stock markets gained 1.3%.

Silver bullion prices today rose 5.3% from Wednesday’s London Fix to trade at $33.35 per ounce, a better than 2-month high.

Hong Kong stocks added 1.6% on their first trading day after the Lunar New Year holidays.

“Because the low US interest rate will continue to 2014, I think it gives good support to stock and gold markets,” Reuters quotes Ronald Leung of Lee Cheong Gold Dealers.

“But Hong Kong is still in a holiday mood. I don’t expect too much activity on our side for the whole week.”

“We would expect prices to ease off as the euphoria subsides,” says Marc Ground at Standard Bank in London, reporting “some profit-taking already overnight in Asia, which kept precious metals from rallying further.”

Gold traded on the Hong Kong Gold Exchange rose 3.4% today, as did Tokyo gold futures, which jumped to their highest level against the Japanese Yen in 7 weeks.

Meantime in Europe on Thursday, the Greek press reported that private-sector investors were nearing a deal with Athens’ officials over the interest rate to be paid on new bonds, issued to compensate them for a 50% or greater write-down of their existing positions.

Various reports put the rate between 3.75% and 4.0% per year.

The Euro currency today touched its best level vs. the Dollar in 5 weeks at $1.3170, up by 4.3% from last week’s 16-month low.

Eurozone investors looking to buy gold, however, also saw it rise in price to break €42,000 per kilo – a level first breached in mid-August and barely 5% below Sept’s all-time high.

“Gold finally made the breakout,” says one London dealer in a note. Thanks to the Fed’s announcement, “The blue touch-paper was lit.”

Formally announcing a 2% annual target for US consumer-price inflation, Fed chairman Ben Bernanke said in his quarterly press conference on Wednesday that “[Our] framework makes very clear that we need to be thinking about ways to provide further stimulus if we don’t get improvement in the pace of recovery and a normalization of inflation.”

“It sounds like the finger is on the trigger [for more quantitative easing],” reckons one money-market economist quoted by Reuters.

“Financial repression,” says Bill Gross, founder and co-manager of the $1 trillion Pimco bonds fund-management group on Twitter, pointing to the loss of real value imposed on savers by sub-zero returns after inflation.

“QE 2.5 today, QE 3, 4, 5… lie ahead.”

“[The Fed's policy committee] have now locked themselves in to [zero rates until] at least late 2014,” says a note from RBC analysts. “This shows you the level of worry.”

“The median [inflation] expectation of the committee may be lower than we had expected,” says Goldman Sachs.

“Indeed, a significant proportion of the committee may project the first rate hike in 2015 or later.”

Adrian Ash
BullionVault

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