Pounds Falls on UK Trade Deficit, QE2 and Economic Recovery Concerns – Gold Rises to £816/oz

Gold

Gold is flat in dollars but higher in euros, Swiss francs and particularly British pounds this morning (see Cross Currency Table). Jitters about European sovereign debt markets is keeping gold above $1,250/oz  and near record highs of $1,265/oz. The complacency of recent weeks is giving way to the gradual realisation that the worst may not be over yet, in terms of the global financial crisis and this could lead to a challenge of $1,300/oz in the short term rather than the long term.

Sterling has fallen sharply against all currencies on concerns of an uneven economic recovery and the trade deficit widening to a record in July as imports surged (particularly of oil). The goods trade gap widened to 8.7 billion pounds ($13.4). The Bank of England is considering a second wave of bond purchases as the UK housing market and economic recovery is wavering. Gold in sterling is 5% below its record high of £857.22/oz seen in June (07/06/10 – see chart) and should UK economic conditions deteriorate again, which seems likely, then this nominal record high will be challenged.

Gold is currently trading at $1,255.10/oz, €987.33/oz, £814.95/oz.

Gold in Sterling – 1 Day (Tick). Click on image to view full size

Gold in Sterling – 1 Year (Daily). Click on image to view full size

The ECB has been engaged in its largest-scale bond purchase since July, having picked up €100m to €300m dollars worth of Greek, Irish and Portuguese debt this week according to reports. With EU nations borrowing requirements set to test financial markets in the coming months, concerns regarding possible sovereign defaults are leading further quantitative easing on behalf of the ECB – the medium and long term effects of this on the value of the euro remain unknown. Today Ireland is testing the bond market selling €1.5bn of four-year and 10-year bonds.

Markets are also concerns that the problems in the eurozone financial system are not confined to the periphery countries (primarily Greece, Portugal and Ireland) and there are also concerns about German banks. The bund climbed for the third day this week after FT Deutschland cited ECB chief economist Juergen Stark as saying some German banks are undercapitalized. Germany’s 10 biggest lenders, including Deutsche Bank AG and Commerzbank AG, may need about 105 billion euros ($135 billion) in fresh capital because of new regulation, the Association of German Banks has said.

Cross Currency Rates at 1000 GMT. Click on image to view full size

Silver

Silver’s support is at $19.33/oz and resistance at $20.00/oz.

Silver is currently trading at $19.94/oz, €15.69/oz and £12.95/oz.

Platinum Group Metals

Platinum’s support is at $1,500/z and resistance at $1,565/oz, 14-day.

Platinum is trading at $1,550.00/oz, palladium is at $520/oz and rhodium is at $2,050/oz.

Mark OByrne

Also on news-goldcore-com

Videos

Tavi Costa- The Fed is Trapped

Silver Market Predictions – Ed Steer Talks about the Silver & Gold Price

Are We In A Financial Bubble? Peter Grandich Interview

Blog posts

Lawrence Lepard – Living in a World with Inflation

Lawrence Lepard Portfolio Manager and advocate of sound money, is our guest on this episode of GoldCore TV. With 40% of money in the US being created in the last 2 years, we ask Lawrence if the Fed is trapped. If so will this mean that it is going to be very difficult for them […]

READ MORE

Supply Chain Crisis Effects on Gold & Silver

The broken chain – could the supply crunch be worse than the oil crunch of the 1970s Anyone that has bought a new or used car in the last year has faced higher prices and long wait times for delivery. This is all because of the very small but essential semiconductor, which is in short […]

READ MORE

This is a Long Term Bullish Pattern for Gold – Gareth Soloway on GoldCore TV

“This is a long term bullish pattern for gold!” – Gareth Soloway Gold In this latest episode of GoldCore TV, Gareth Soloway joins Dave Russell to discuss what what the charts are suggesting for the stock markets, bond markets and #bitcoin. In addition to this he also takes a look at his gold price forecast 2021 and beyond.Gareth identifies the key levels that […]

READ MORE

Featured

Gold, the Tried-and-True Inflation Hedge for What’s Coming!

READ MORE

How High is Too High for Rising Government Bond Yields?

READ MORE

Silver – 7 Reasons it is Still Set to Soar

READ MORE
Newsletter
Category
Archives
Popular

No posts available

Videos

Tavi Costa- The Fed is Trapped

Silver Market Predictions – Ed Steer Talks about the Silver & Gold Price

Are We In A Financial Bubble? Peter Grandich Interview

Blog posts

Lawrence Lepard – Living in a World with Inflation

Lawrence Lepard Portfolio Manager and advocate of sound money, is our guest on this episode of GoldCore TV. With 40% of money in the US being created in the last 2 years, we ask Lawrence if the Fed is trapped. If so will this mean that it is going to be very difficult for them […]

READ MORE

Supply Chain Crisis Effects on Gold & Silver

The broken chain – could the supply crunch be worse than the oil crunch of the 1970s Anyone that has bought a new or used car in the last year has faced higher prices and long wait times for delivery. This is all because of the very small but essential semiconductor, which is in short […]

READ MORE

This is a Long Term Bullish Pattern for Gold – Gareth Soloway on GoldCore TV

“This is a long term bullish pattern for gold!” – Gareth Soloway Gold In this latest episode of GoldCore TV, Gareth Soloway joins Dave Russell to discuss what what the charts are suggesting for the stock markets, bond markets and #bitcoin. In addition to this he also takes a look at his gold price forecast 2021 and beyond.Gareth identifies the key levels that […]

READ MORE

Featured

Gold, the Tried-and-True Inflation Hedge for What’s Coming!

READ MORE

How High is Too High for Rising Government Bond Yields?

READ MORE

Silver – 7 Reasons it is Still Set to Soar

READ MORE