Draghi Disappoints and the IMF Warns About the US Fiscal Cliff

Today’s AM fix was USD 1,595.00, EUR 1,303.53, and GBP 1,024.74 per ounce.
Yesterday’s AM fix was USD 1,604.50, EUR 1,305.53and GBP 1,031.90 per ounce.

Silver is trading at $27.32/oz, €22.37/oz and £17.61/oz. Platinum is trading at $1,402.20/oz, palladium at $573.30/oz and rhodium at $1,100/oz.

Gold dropped $10.50 or 0.66% in New York yesterday and closed at $1,588.70/oz. Silver was down to a low of $26.97 and finished with a loss of 0.91%.


Cross Currency Table – (Bloomberg)

Gold traded sideways on Friday, hovering after its 4 days of losses when the European Central Bank fell short of any immediate bold action to help the Eurozone debt crisis. Draghi’s comment "to do anything it takes” was a clear example of over promising and under delivering. Gold has lost about $40 since it peaked during the initial euphoria over Draghi’s pledge.

Regarding the ECB implementing swift market intervention, the bank said it postponed a decision “for a few weeks”. (Weidmann won Round 1)

The Bank of England also left rates unchanged yesterday.

Investors are cautious ahead of today’s US jobs report at 1230 GMT.

Nonfarm Payrolls are expected at 100,000–115,000 up from 80,000 in June, while the unemployment rate is expected at 8.2%.  If the figures shatter expectations on the upside this would be negative for gold prices. A disappointment in nonfarm payrolls data would show that job creation cannot sustain the unemployment rate and could help gold break through the $1,600/oz resistance level.


Gold Prices/Rates/Fixes /Volumes – (Bloomberg)

While most market players are enjoying summer holidays, many investors are waiting on the sidelines in cash.     

A US bill sponsored by Congressman Ron Paul would require the Federal Reserve to be subjected to an audit of monetary policy, including deliberations over changes to the benchmark interest rate.  

US Fed chairman, Ben Bernanke, claimed it would diminish the Fed’s independence and subject policy making to political pressure.   

The bill, passed US Congress 327-98, and needs Senate approval plus President Barack Obama’s signature before becoming law.

Christine Lagarde, Head of the IMF, cautioned policy makers on both sides of the pond that they “should continue to be in crisis management mode” to deal with both the euro-zone debt crisis and the gaping US fiscal cliff.

And, she added, there are “serious questions about the US economic future” if policymakers fail to avert a fiscal cliff before January, at which point government spending will drop and taxes will rise sharply.”

The global economic downturn is not going away until some drastic steps in fiscal policy are undertaken.

Stephen Flood

Stephen Flood is the CEO of GoldCore. He is a former Wall Street equity trader and FinTech expert. He has been involved in the precious metals markets since 2004 and has appeared as an expert contributor on CNBC, CNN, BBC, RTE & Bloomberg TV and has had articles published in the Irish Times, Irish Independent and The Sunday Business Post.

Also on news-goldcore-com

Videos

Episode 5 of The M3 Report with Steve St Angelo

What we can Learn from the International Gold Market

Jim Rogers Interview 2022

Blog posts

Ross Geller inspires Bank of England policy

This morning the UK pound slumped as one of the world’s oldest central banks pressed hard on the panic button. The Bank of England was seen to be shouting ‘Pivot! Pivot! Pivaat!’ as they announced they would temporarily suspend their programme to sell gilts and will instead buy long-dated bonds.  In a statement, the bank […]

READ MORE

Episode 5 of The M3 Report with Steve St Angelo

Is the energy crisis something that can be resolved? Was it always inevitable? Will renewable energy make it all OK? Are Western financial policies to blame? All this and more in today’s The M3 Report! If you’re not already subscribed to GoldCoreTV then click here right now to make sure you’re all set to watch the fifth […]

READ MORE

Brace Yourself for the Impact

Fed’s message this week – higher rates, lower economic growth, higher unemployment. The Fed hiked interest rates by 75 basis points for the third straight meeting and the statement said that the committee anticipates further increases. The Summary of Economic Projections (SEP) showed that the median projection is for a further 1.25% increase by yearend. […]

READ MORE

Featured

Rick Rule- Should You Invest In Gold 2022

READ MORE

Jim Rogers- The Worst Bear Market is Coming

READ MORE
Newsletter
Category
Archives
Popular

No posts available

Videos

Episode 5 of The M3 Report with Steve St Angelo

What we can Learn from the International Gold Market

Jim Rogers Interview 2022

Blog posts

Ross Geller inspires Bank of England policy

This morning the UK pound slumped as one of the world’s oldest central banks pressed hard on the panic button. The Bank of England was seen to be shouting ‘Pivot! Pivot! Pivaat!’ as they announced they would temporarily suspend their programme to sell gilts and will instead buy long-dated bonds.  In a statement, the bank […]

READ MORE

Episode 5 of The M3 Report with Steve St Angelo

Is the energy crisis something that can be resolved? Was it always inevitable? Will renewable energy make it all OK? Are Western financial policies to blame? All this and more in today’s The M3 Report! If you’re not already subscribed to GoldCoreTV then click here right now to make sure you’re all set to watch the fifth […]

READ MORE

Brace Yourself for the Impact

Fed’s message this week – higher rates, lower economic growth, higher unemployment. The Fed hiked interest rates by 75 basis points for the third straight meeting and the statement said that the committee anticipates further increases. The Summary of Economic Projections (SEP) showed that the median projection is for a further 1.25% increase by yearend. […]

READ MORE

Featured

Rick Rule- Should You Invest In Gold 2022

READ MORE

Jim Rogers- The Worst Bear Market is Coming

READ MORE