Posted on 10/30/2012 9:28:49 AM PDT by blam
President Romney "Would Be Bad News for Gold"
Commodities / Gold and Silver 2012
Oct 30, 2012 - 07:05 AM
By: Ben Traynor
THE SPOT MARKET gold price traded just below $1715 an ounce during Tuesday morning's London session, little changed from last week's close, while European stock markets recovered their losses from a day earlier and UK and German government bond prices fell.
"Downside targets will be in focus while the gold price stays below the 17 October high at $1753.86," says Commerzbank senior technical analyst Axel Rudolph.
The silver price climbed above $32 an ounce shortly after London opened, holding above that level for most of the morning, while other commodities were broadly flat.
Markets in the US are due to remain closed for the second day running as a result of Hurricane Sandy. Monday's trading saw gold futures volumes "far below normal", one analyst said, with another adding the market remained "pretty quiet" on Tuesday morning.
Press reports suggest that this Friday's US nonfarm payroll report could be delayed as a result of the storm.
The Bank of Japan meantime increased the size of its quantitative easing program Tuesday for the second time in as many months, from ¥80 trillion to ¥91 trillion. Of the additional ¥11 trillion, ¥10 trillion will be used to buy government debt while the remaining ¥1 trillion will be put into riskier assets, with half being earmarked for exchange traded funds.
The Yen rallied nearly 1% against the Dollar immediately after the decision, while the Yen gold price fell by 1%.
"Most people had forecast and priced in further easing this time," said Soichiro Monji, chief strategist at Daiwa SB Investments in Tokyo, shortly after the decision was announced.
"Investors are selling to lock in profit after the announcement, learning lessons from September, when a rally lasted for only a few hours."
The BoJ "aims to achieve its goal of 1% [inflation]" said a statement issued jointly by the central bank's governor and Japan's finance and economy ministers.
"The government strongly expects the Bank to continue powerful easing," it added.
"The question that inevitably arises," says Neil Mellor, senior currency strategist at BNY Mellon, "is to what extent government pressure, and the presence of economy minister Maehara, influenced the decision?"
Here in Europe, Spain's economy shrank by 1.6% year-on-year in the third quarter, the fifth successive quarter of contraction, according to official GDP figures published Tuesday.
Spain's parliament is to invite European Central Bank president Mario Draghi to discuss the Outright Monetary Transactions program he announced last month, Reuters reports.
Under OMT, the ECB could buy sovereign debt on the open market conditional on the beneficiary country being in a bailout program.
A victory for Mitt Romney in next week's US presidential election would be bad for the gold price, according to an article published by the Financial Times today.
"[Romney] would replace Ben Bernanke with a more hawkish chairman of the Federal Reserve when the latter’s term expires in January 2014," the FT's Jack Farchy writes.
"If that means a change in direction from the Fed’s current experimental and super-accommodative monetary policy, gold could suffer."
"The Dollar might strengthen regardless of the election result," says Matthew Turner, precious metals strategist at Mitsubishi.
"Political uncertainty would be reduced if there is a clear election victory."
"Should Mitt Romney win, the attitude towards monetary measures is...likely to change " says a note from gold bullion refiner Heraeus.
"In the short term [though] we still expect that [gold] falling below $1700 an ounce would fuel fresh purchases."
Guns and ammo will fall too.
Bomb shelters, survival gear, windup radios, zombie-bite antivenon...
Exactly the opposite will happen.
Since a collapsed economy would be good for gold, bring it on...
Exactly the opposite will happen.
I am significantly invested in gold, but I would rather have the economy rebound and financial markets stabilize, than have the gold price soar.
Why is someone THIS STUPID allowed to write articles?
Gold goes up as a protection against bad money policies.
It is a CONTRA-INDICATOR of a good economy
When things are humming along nicely Gold is cheap. When they are going to heck in a handbasket gold soars...
Duhhhhhhhhhh........
(not you blam, the article writer)
All that’s holding back inflation now (though I still assert that it’s being hidden through various means) is that there is no money velocity.
Everyone is hoarding their money out of fear of 0bama policies.
When the velocity picks up, whoa, Nelly! Too many dollars chasing too few goods.
If Prez Romney implements a fraction of what he promised, our economy will take off. There is a lot of pent up demand and corporate cash waiting for the right moment.
With the rest of the world in a slump, the foreign investors will bring trillions of dollars back to U.S. markets.
The lib media will howl as inflation takes off. U.S. equities, RE, and PMs should rise as well.
There is normally a time lag between increases in money supply and resulting inflation. Romney will get blamed for Bernanke’s and Obama’s folly.
BTW, Blam, thanks for your continuing excellent coverage of financial news. You perform a valuable service for your fellow Freepers.
Loose money policy is what Bernanke and Obama love. Romney getting in would mean a tighter money policy...bad for gold. No one can be as loosey goosey, as spendthrift and financial illiterate Obama. Obama only cares about spending Federal tax dollars on buying votes, affirmative action programs,food stamps, welfare, green energy and other idiocies
Bernanke just might resign if Romney gets in. Bernanke Fed term runs until 2014 but if Romney wants him out, I think he will accommodate
A voice of sanity in a sea of craziness.
Didn't Romney mention going back to a gold standard? That would do wonders for your investment, I would think.
It concerns me that there are so few who follow John Williams of Shadowstats, Jim Sinclair of Mineset, Dan Norcini on Trader Dan and the many voices on King World News. After 50 years of market watching I feel these folks are quite as wise as possible and they are pretty close to unanimous in being bullish for the gold and silver side and bearish on the fiat currency. They dont think we conservatives can turn our sinking economy around in time which is why one should hedge deeply as possible with physical bullion...
Bad news for gold is good news for the world.
The massive money printing and balance sheet expansion should ensure dollar devaluation under an inflationary depression with 0bama, and economic expansion, hopefully, under Romney. If Romney wins, all the dollars sitting on the sidelines will flood into the economy and likely produce inflation. The big question is whether a lot of the money sitting on the sidelines will be taken out of gold and into productive investments so that the gold price falls. I think at least in the short run, gold will fall with a Romney win as many switch from gold to energy investments.
already read this but thanks anyhow! much seems in accord with thinking shared by ‘wise men’ I follow and nice to think some other good voices out there!
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