INTERNATIONAL. The U.S. gold futures continued to weaken on Wednesday and Thursday, falling 0.9% to US$1,565.3, and underperformed the broader markets.
In the past two days, the S&P and the Stoxx 50 dropped 0.5% and 0.6% respectively, while the Euro/dollar fell 0.38% to another two-year low.
The CRB commodity index climbed 0.56%, and the Dollar Index went up 0.31%. The U.S. and the German 10-year government bond yields rallied by 5 and 7 basis points respectively, approaching the twenty-year low level reached in the beginning of June.
Gold prices retreated, as the U.S. Fed did not indicate an imminent QE3 in the FOMC minutes released yesterday, although some members favoured further policy easing if the Fed's dual objectives of full employment and stable prices cannot be achieved.
However, the FOMC meeting took place before the U.S. Labour Department reported a weak payrolls number in June. Next week, Ben Bernanke will testify before the Congress on the U.S. economic outlook, giving the market more insights of his thinking.
On Thursday, Moody's cut Italy's sovereign rating two notches to Baa2 from A3, and warned of further downgrades, due to Italy's higher funding costs, contracting growth, and risks from Greece and Spain.
Although the Euro area's industrial production surprisingly climbed 0.6% in May, helped by Germany's rebound of 1.5%, the Euro area is still expected to contract in Q2.
According to the Washington-based Pew Research Centre, the global economic mood is still pretty grim: a median of 27% of the 21 surveyed countries consider their economy is doing well, with the number for the U.S. at 31%, and that for Europe at 16%.
A surprise rate cut by Korea, and the plunge of Singapore's GDP to -1.1% in Q2 reflected external weaknesses, and the impact from European's debt crisis. China's Q2 GDP slowed to 7.6% in Q2 from 8.1% in Q1, allowing China more room to ease.
On Wednesday, the world's second largest gold company, Goldcorp, cut back its 2012 gold production by about 200,000 ounces. Earlier in June, South Africa reported gold production was down 12.8% yoy in April. Operational delays and safety-related maintenance issues have restricted gold supplies.
Next week, the events to watch include Bernanke's testimony to Washington on 17 to 18 July, and the E17 group meeting on 20 July.
Note: SharpsPixley.com is the the online platform for Sharps Pixley Ltd, a physical precious metals trader.
SharpsPixley.com aims to bring you the latest gold news, live gold prices and gold charts and is an online shop for buying gold bars and gold coins.
Buying gold has never been easier or more attractive and is a great investment. SharpsPixley.com will allow those interested in buying precious metals to buy gold against the live spot price of gold, and SharpsPixley.com will keep you informed of all the latest market trends using our gold news feeds, our gold charting tools, and displaying live gold prices from around the world.
Click here for more information about Sharps Pixley.
© Copyright Sharps Pixley 2012
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.