Bernanke Remarks At G20 Ignite Precious Metals Market
The price to invest in Gold dipped to $1,608.90 an ounce after testing below $1,600 briefly on Friday, while the price to invest in Silver eased to $29.93 an ounce, after Fed Chairman Bernanke remarked at the G20 meeting in Moscow, that the U.S. economy is recovering and it's reducing the need for additional stimulus, adding "Consistent with the G7 policy statement, the United States is using domestic policy tools to advance domestic objectives."
The Moscow meeting of finance ministers and central bank Governors from the Group of 20 nations represents 90 percent of the world's gross domestic product (GDP) and over 60 percent of its population. G20 officials have decided not to single out Japan for censure after it initiated aggressive expansionary policies recently that have driven the value of the yen lower and drawn scorn from some members.
"If the yen remains relatively weak, I think other emerging markets, or Asian central banks, should start to become more proactive in managing their exchange rates," said Michael Widmer, of BofA Merrill Lynch Global Research. "If that happens their FX reserves should start to increase, and then they should start to diversify their U.S. dollar holdings into Gold holdings again, which has happened during the past few years." The G20 disregarded key parts of the G7 currency statement issued earlier this week, deciding instead to draft their own communique that made no mention of new debt-cutting targets that Germany was pressing for because the U.S. wanted them eliminated.
"We think a currency war will be the biggest story of 2013 when we look back on the year," said Patrick Armstrong, of Armstrong Investment on CNBC. It seems that the world's finance ministers are working overtime to diminish the perception that a currency wars even exists, yet the current global currency devaluation now underway is a bullish factor for precious metals in the future due to the inflation that is certain to follow. ”
As physical buying from Asia has been absent from the market due to the Lunar New Year, which is a week- long celebration in China.
"Hopefully, next week when China comes in, we will see more support on Gold," said Brian Lan, of GoldSilver Central Pte Ltd. "The outlook for Gold demand remains strong in 2013," says Marcus Grubb, of the World Gold Council (WGC), "We expect jewelry demand to remain buoyant, driven largely by wealth creation in India and China, and the re-synchronization of economic growth in both countries." India's Gold imports hit 100 tons in January, surging 23 percent as investors bought physical Gold ahead of a nearly 6 percent duty hike, levied by the Indian government as it struggles to reduce its import bill.
Astute investors, as well as central banks, use modest pullbacks in Gold, like this one, to add to their physical holdings. The WGC reported, "annual Gold demand was 15 percent higher [in 2012] than the average for the previous five years, with much of that growth coming from the physical bar segment of investment demand and central-bank purchases."
Meanwhile, in the U.S., Senate Democrats have unveiled a $110 billion plan that is designed to delay until 2014, the sequestered across-the-board spending cuts due to kick in on March 1. There is a problem, however, according to Congressional Republicans, because the plan includes an alternative minimum tax rate of 30 percent on top earners with incomes over one million dollars. Senate Majority Leader Reid, from Nevada, said that half the cost of delaying the sequestration would be covered by revenue increases and the rest through spending cuts. .
GOLD CHART
Gold has reached our the next trend line of importance. The lower RED channel lines is the major channel support. This line we’ve reached is also important and some type of bounce or even a short term low could well be forming. The trends are all still down but this area could provide a low attempt. The G20 meeting this weekend is a big affair as the Yen and other sovereigns will surely be addressed. The set up was perfect this week with China closed, and with this G20 meeting and with USA CLOSED ON MONDAY.
Support is 1596-1600 in gold and first resistance is now the 1618-1622 area. In summary, the trends are still down but one of these two trend lines will have a good chance for a low with the RED channel the most important.
===================================================
GOLD CURRENT TRADE
===================================================
Long 1 April Mini Gold at 1603 on 15/02/2013GOLD CURRENT TRADE
===================================================
Stop lose at 1582
===================================================
YOU SHOULD NOT TAKE ANY MATERIAL posted on this BLOG AS RECOMMENDATIONS
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
Do your own due diligence.
No one knows tomorrow's price or circumstance.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
King Regards
