Read the Beforeitsnews.com story here. Advertise at Before It's News here.

By BullionVault.com (Reporter)
Contributor profile | More stories

Story Views
Now:
Last hour:
Last 24 hours:
Total:

2017 Looking 'Friendly' for Gold Prices on Trump's Threat to US Credit Rating as ECB Extends But Cuts Euro QE

Thursday, December 8, 2016 7:19

% of readers think this story is Fact. Add your two cents.

Adrian Ash is head of research at BullionVault, the world-leading gold trading & ownership service online…

GOLD PRICES fell back 0.7% after reclaiming last week’s closing level versus the Dollar once again in London lunchtime Thursday, dropping to $1170 per ounce as the US currency continued its post-Trump victory gains amid a surprise change in policy from the European Central Bank.

Central bank for the 19-nation Euro currency zone, the ECB left its key interest rates unchanged – including the 0.4% per year now charged, rather than paid, on commercial banks’ deposits with the Frankfurt-based authority – and extended its QE program from the previous March 2017 deadline as expected.

But now looking to December 2017 “or beyond as necessary”, the ECB will only create and spend €60 billion of new money per month, down from €80bn at present.

“Is that taper or not?” asked puzzled analysts, referring to the US Federal Reserve’s 2014 reduction of monthly QE creation and spending.

Looking at January’s inauguration of new US president Donald Trump meantime, “Exuberance will last into the first weeks of the new administration,” forecasts a new analysis from commodities and bullion market-maker ICBC Standard Bank today, “but expect animal spirits to run out of gas by mid-year.

“Fresh credit ratings agency concern is a possibility that is not yet being discussed,” it says, noting that “some Trump campaign proposals resemble the Bush-era tax bills – widespread personal rate and corporate tax cuts.

“Anticipation of reflationary fiscal measures may keep gold under pressure in Q1 but the debt ceiling and budget deficit will dominate headlines by H2 – that will recreate a gold-friendly environment.”

Arguments over raising the US government’s legal ‘debt ceiling’ limit on total borrowing saw Washington’s credit status downgraded from the top AAA rating for the first time in 70 years in August 2011, coinciding with gold’s surge to its current all-time record high above $1900 per ounce.

US federal debt was then revised up from “negative” to “stable” at one notch below triple-A by both the S&P and Moody’s ratings agencies in June 2013 – just as gold completed its worst quarterly price drop in 3 decades – and upgraded back to “AAA stable” by analysts at both Fitch and DBRS in spring 2014.

Looking meantime at interest rates ahead of next week’s US Federal Reserve decision, “what matters to US GDP growth [is that] the consumer is king,” ICBC Standard Bank goes on.

So with US bond yields rising sharply, “Q1 may be as good as it gets [for economic optimism, because] a continuation…would squeeze disposable income growth and pose a threat to mortgage lending and real estate activity.”

Led by longer-dated US Treasury yields, mortgage interest rates have surged since Trump’s victory, with the cost of 30-year home loans leaping from the summer’s near-record lows to more than 4.0% last week.

Facing “an uncomfortable year” ahead in 2017, the US Fed is “unlikely to get the opportunity to hike more than twice,” says ICBC Standard Bank.

Less than one-third of betting on Fed interest-rate futures for November 2017 currently sees more than 1 hike following next week’s near-certain rise to a ceiling of 0.75%.

Elsewhere, Bloomberg News reported overnight that global benchmark auction the LBMA Gold Price will now accept new and changed orders from so-called “indirect” participants.

With US-listed brokerage INTL FC Stone apparently the first non-member to do so on Monday, this means that clients of the 13 banks currently meeting online to try and identify the single price which clears the most business can now respond to the auction’s suggested price as it moves higher or lower.

This electronic auction’s century-old predecessor – the London Gold Fix, which the new process seeks to replicate – relied on client orders changing “in running” to balance supply and demand across the market.

The Fix ended in 2015 after its sister benchmark, the London Silver Fix, saw one of its 3 direct member participants, Deutsche Bank, quit the process amid allegations of “market abuse” across its commodities, interest rates and currencies divisions.

The London Silver Fixing Limited – the private business owned by the former auction’s direct members – is being sued in an “anti-trust” lawsuit in New York, a suit in which Deutsche Bank has already settled, sharing with the plaintiffs what their lawyers this week asserted is “smoking gun” evidence of conspiracy “with other large market makers…like…HSBC [and] UBS.”

Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK’s leading financial advisory for private investors, Adrian Ash is the editor of Gold News and head of research at BullionVault – winner of the Queen’s Award for Enterprise Innovation, 2009 and now backed by the mining-sector’s World Gold Council research body – where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

Most people who use social media have figured out that Facebook and Google are in cahoots with the government. For those who are well aware of the issues, it’s high time you switched over to Seen.life.

Seen.life is a website that is similar to Facebook but without all the censorship. Firearm friendly, you may buy sell or trade anything allowed by site TOS rules.

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.

Source: https://www.bullionvault.com/gold-news/gold-price-120820162

Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!

Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST

Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)

Oxy Powder - Natural Colon Cleanser! Cleans out toxic buildup with oxygen!

Nascent Iodine - Promotes detoxification, mental focus and thyroid health.

Smart Meter Cover - Reduces Smart Meter radiation by 96%! (See Video).

Comments

Online:
Visits:	1,599,581,491
Stories:	8,139,559