After touching the upper line of the price channel on 4-hour chart, USDJPY pulls back from 80.18. The fall could possibly be resumption of the downtrend from 84.17 (Mar 15 high), further decline towards 78.00 would likely be seen over the next several days. Resistance remains at the upper line of the channel, only a clear break above the channel resistance could signal completion of the downtrend.
Article by Investment U
One new option to note, iShares invests in an index of dollar bonds based on the J.P. Morgan USD Emerging Markets Bond Fund (NYSE: EMB).One question on many investors’ minds right now is how to beat inflation. U.S. Treasuries and certificates of deposit obviously can’t cut it right now…
There’s a simple reason investors are flocking to the dividend market – savers don’t want to lose their purchasing power.
But lately there’s been a new trend for yield chasers overseas and it may be less risky than you think. Returns over inflation look very attractive right now. For the first quarter for 2012, the average emerging bond fund tracked by Morningstar returned 7%, versus 0.3% for the Barclays Capital U.S. Aggregate Bond Index.
Some fund companies offer two types of emerging market bond funds: those that invest mainly in bonds issued in U.S. dollars and those that invest mainly in bonds issued in local currencies.
Dollar-denominated foreign bonds have been on the rise and they attract those who are a little hesitant about currency risk.
Because of lower borrowing costs, companies from nations such as Brazil, Russia and Indonesia are diving into the U.S. debt market.
This is a good thing for potential investors in the market. Emerging market firms issued a record $75 billion in dollar-denominated bonds in the first quarter, a 40% spike over the same period last year.
The extra bonds out there have given investors a way to get higher yields than what’s available at home. The “yield chasers” have pumped in $14 billion into emerging markets bond funds in the first quarter, the most since the third quarter of 2010.
Have corporate bonds in emerging markets become fashionable because of a herd mentality? Or have we here stateside gotten over our developed country bias?
Bonds have been proven to add true diversification to portfolios. Also, bond issuers – countries and companies – in developing markets are maturing. By some measures, their bonds look more attractive than those of the developed world.
In a March research paper, Christopher B. Philips and colleagues in Vanguard’s Investment Strategy Group found that a well-diversified portfolio that includes an allocation to hedged international bonds may could help get rid of overall portfolio volatility.
The study showed that investors could benefit from allocating at least 20 to 40% of their fixed-income holdings to international bonds. Emerging market bonds could be part of that allocation for risk-tolerant investors, Mr. Philips said.
What scared a lot of investors from international bonds are interest rate risk, shady political regimes and policies, and the economies of many different markets. Mr. Philips’ team found that the things driving international bond prices are relatively uncorrelated to those same things in the United States. That’s key as a diversification benefit.
Things you need to be wary of overseas:
Some things that may allow you to overcome your concerns:
Among funds tracked by Morningstar, there are no index mutual funds for emerging-market bonds yet. Index ETFs investing in emerging market bonds are available, but as we’ve written many times before, watch out for leveraged bond funds. One new option to note, iShares invests in an index of dollar bonds based on the J.P. Morgan USD Emerging Markets Bond Fund (NYSE: EMB).
Good Investing,
Jason Jenkins
Article by Investment U
Article by Investment U
In order to have a truly diversified portfolio, you must include a healthy dose of foreign investments.
Imagine if throughout your working career you only did what you were supposed to 30% of the time.
Would you have been showered with raises, bonuses and praise? Or do you think you would’ve been left underpaid, unappreciated and unsuccessful?
The likely outcome is the latter. It’s obvious.
Yet many investors don’t realize they’re making a similar mistake when it comes to their financial portfolio.
That is, they’re only doing 30% of the “work” necessary to get the most out of their investments.
How are they doing this?
By simply ignoring companies that operate outside of the United States. Let me show you what I mean…
According to The World Bank, the U.S. accounts for 30% of the world’s total equity market cap.
Granted, that’s a huge chunk for any one nation.
But it also means 70% of the all the publicly traded opportunities around the world are found outside of America.
And that’s not all…
The point is: In order to have a truly diversified portfolio, you must include a healthy dose of foreign investments.
At Investment U, our Asset Allocation Model suggests dedicating 30% of your total portfolio to foreign stocks.
So where can you look for great opportunities to profit?
One place to consider – that isn’t on everyone’s radar yet – is one of Latin America’s fastest-growing global markets.
I’m talking about Colombia…
Believe it or not, after years of drug violence, The World Bank says Colombia is the most secure country in all of Latin America to do business.
In fact, foreign investment has more than quadrupled there since 2002. It even hit a record all-time high in January. And it looks like this is just going to be the very beginning…
On Thursday, Colombia and China reached an agreement that will bolster its exports of coal and oil to Asia.
If you didn’t know, Colombia is already the third largest exporter of oil to America.
Now that it’s going to start increasing its role in Asia, too, oil companies in Colombia are propped to enjoy a long period of prosperity.
Investors can take advantage of this enormous opportunity by investing in a company like Ecopetrol S.A. (NYSE: EC).
Ecopetrol is Colombia’s largest oil and gas company. With a market cap of $113 billion, it conveniently trades directly on the NYSE. It even has a solid dividend yield of 3.3%.
What’s more, the company is currently experiencing quarterly revenue growth of 25%. It’s operating and profit margins are sitting pretty at 24% and 37% respectively. And its stock price has been on a tear… up 45% so far this year.
But no matter whether you’re into opportunities in South America, Asia, or anywhere else, just remember to expose your portfolio to emerging markets and foreign investments.
You won’t regret it.
Good Investing,
Mike Kapsch
Article by Investment U
Article by Investment U
The benefits of preferred shares is that you get a good yield, a more secure position than common stock holders and, in these uncertain times, less risk.Perhaps the most pressing request I hear from investors these days is for an investment with a decent yield and not much risk.
Unfortunately, it doesn’t exist. High-yield stocks can tank. High-yield bonds carry default risk. Even conservative utility stocks can get socked in the stomach by higher inflation or interest rates.
There are, however, several solutions. You can own individual bonds so your expenses are lower and you’re assured of getting your principal back at maturity (provided, of course, you don’t plunk for the really junky stuff). You can diversify among high-yield stocks, accepting that you’re going to experience higher volatility than a bond portfolio.
But you should also consider something else: Preferred shares with their current 6% to 7% average yields.
Preferred shares are hybrid securities with the properties of both stocks and bonds. They generally carry no voting rights but have a dividend that has priority over the common stock. (Hence the “preferred” label.) And, like common stock dividends, preferred dividends are taxed at the favorable 15% maximum tax rate (although that may end come January 1 if President Obama and his fellow Democrats have their way).
The benefits of preferred shares is that you get a good yield, a more secure position than common stock holders and, in these uncertain times, less risk.
Of course, preferreds still fell in the recent financial crisis. But they dropped only two-thirds as much as the S&P 500. They also rebounded more strongly during the recovery.
For instance, the largest preferred stock ETF, the $8.5-billion S&P U.S. Preferred Stock Index (NYSE: PFF), returned 22% annualized over the three years through April, boosted by its high yield and heavy tilt toward the recovering financial services sector. That is more than two percentage points better than the S&P 500 over the period, and more than five points above the average high-yield bond fund, according to Morningstar.
But understand the downside, too. Like bonds, preferreds are interest-rate sensitive. When rates go up, prices go down. Unlike bonds, however, these securities will either never mature or may not for as many as 50 years. So if interest rates rise, the preferred investor could be stuck with lower-valued paper that a corporate issuer may never redeem.
At the same time, there’s limited upside potential with preferreds because the issuer typically has certain redemption rights. These generally include a “call” provision, where the issuer can buy out shareholders at face value after five years from the issue date.
There is also credit risk. Troubled companies can suspend preferred dividend payments. And while preferred stock is senior to common stock in a corporate bankruptcy, they’re subordinate to bonds in terms of rights to the assets of the company. (Preferred shareholders generally get nothing in a liquidation.)
Still, preferreds offer you higher-than-average yields, less volatility than common stocks and good diversification. In concert with a laddered bond portfolio and a high-quality stock portfolio, they make sense.
Preferreds aren’t a cure-all. Just an income alternative you may never have considered – and one component of a well-diversified portfolio.
Good Investing,
Alexander Green
Editor’s Note: In today’s edition of the Investment U Plus Alex recommends three simple options for investors looking to diversify with preferred shares.
For more information on how to gain access to Investment U Plus and get premium recommendations within each Investment U Daily article, click here.
Article by Investment U
Article by Investment U
You should be able to do better than the Philippines ETF (NYSE: EPHE) if you can pick the companies growing revenue and profits the fastest.
Last week, a crack reporter for a leading investment newspaper asked me the following question:
“What’s the economic significance/implication of a country having a young population?”
I had to think quite a bit before responding. You often read about the connection between demography and investing. Gurus like Harry Dent focus almost exclusively on demographic trends to make their market calls.
In brief, here’s my take on how a youthful population can affect the potential for economic growth of a country. More importantly for investors, what companies will likely prosper with this demographic wind at their back?
But I caution that having a youthful population is far from an automatic success formula. A country needs to have basic institutions in place, such as rule of law and an independent judiciary, good primary education and an open market economy.
Need proof? Many of the poorest countries in the world have a young population, but are mired in war, political instability and corruption. Mali, for example, has 47% of its population under the age of 14.
It’s interesting though to see that younger countries do seem to be growing faster. I don’t want to bury you in numbers, but let me give you some data points.
While America has 20% of its population under the age of 14, the Philippines tops the list at 34.6%. For Peru, it’s 28.5%, Columbia 26.7%, India 27.3%, Mexico 28.2% and Vietnam 25.2%. For China, it’s a surprising low of 17.6%, and Russia comes in at only 15.2%.
On the other side of the equation, the percentage of citizens over the age of 65 is highest in Japan at 22.9%, while it’s 13% in America, 6.6% in Mexico, 6% in Indonesia, 5.5% in Vietnam and only 4.3% in the Philippines.
The Philippines looks like a clear winner on both ends of the age game.
But the critical question for investors is to think through what areas will benefit most from these demographic trends. A growing population and families at the beginning of their consumer life cycle means higher demand for things like food, drugs, consumer banking services like mortgages, cellphones, oil and energy, waste management, autos and motorcycles, construction and housing.
As an example, let’s take a look at the winner of the demographic derby, the Republic of the Philippines. For some time, the Philippines, a country of 100 million, has been a bit of a laggard in Asia, though lately its prospects are brightening. The country is now a net creditor and its budget deficit has dropped to 2% of its GDP. Infrastructure is improving and the political situation seems to stabilizing, and the Philippines’ banking system is the healthiest in Southeast Asia.
All this good news has sparked Manila’s stock market. It was the world’s seventh-best performer in 2011 and, so far in 2012, the Philippines ETF (NYSE: EPHE) is up 25.9%.
You should be able to do better than this basket of stocks if you can pick the companies growing revenue and profits the fastest. Some may think that stock picking is an afterthought after identifying a promising trend or market, but it’s by far the most important decision.
For the Philippines, here’s the challenge: there’s only one Philippine stock trading on the NYSE – Philippine Long Distance (NYSE: PHI). And while it offers a nice dividend, the stock seems rather expensive to me and growth is slowing.
There are also 12 “pink-sheet blue-chip” Philippine stocks that trade over the counter, but the liquidity for them is very poor.
If you have a brokerage account that allows you to invest in the Philippine market though, here are a few companies I like in particular:
For many of you, EPHE is the best fit, but don’t forget your trailing sell stop since there can always be some profit-taking from time to time.
Good Investing,
Carl Delfeld
Article by Investment U
Article by Investment U
It’s not going to last forever, but copper prices are expected to climb at least until 2015.
Forget about gold and oil prices for the moment…
Instead, you should focus your attention on another commodity that has flat-out outshined them both in recent years in terms of price.
I’m talking about copper. That’s right.
Since May 2009, copper prices have exploded nearly 200% while oil and gold prices have “only” ticked up about 70%.
And this epic run isn’t over yet… not by a long shot.
That’s because, even after falling from its all-time highs earlier this year, demand for copper is still growing over four times the rate it’s being produced…
Today, copper is used in everything from construction to electronics to transportation to manufacturing and more.
In fact, many experts refer to it as “Dr. Copper,” stating it has a Ph.D. in economics, as it oftentimes can gauge the overall state of the global economy.
Most recently though, there were two main reasons why copper prices backed off from their record highs:
But like I said, this dip is only temporary.
To see why, we’ll need to take a closer look at the supply side of copper.
According to CRU Group, the copper market deficit will hit 500,000 metric tons in 2012.
Yet this shortage isn’t coming because of increasing demand. It’s happening because there just isn’t enough copper to go around.
The world’s top four listed global copper miners – Freeport McMoRan (NYSE: FCX), BHP Billiton (NYSE: BHP), Xstrata (LSE: XTA) and Rio Tinto (NYSE: RIO) – saw their copper outputs drop recently between 10% and 18%.
Just to keep up with current contracts, Codelco, the world’s leading copper miner, was forced to buy copper from an outside source earlier this year. What’s more, the copper mining industry has undershot production expectations by an annual average of 5% over the past seven years.
I wouldn’t be surprised to see this trend continue, especially as more and more good economic news comes out of the United States.
It’s not going to last forever, but copper prices are expected to climb at least until 2015. That’s when analysts say there will be enough new mines in production to match demand.
Until then, one of the easiest ways to invest in this price increase is through iPath Dow Jones UBS Copper Total Return Sub-Index ETN (NYSE: JJC), which tracks the price of copper futures on the COMEX.
Just be sure to always use trailing stops and never put more than 1% of your total portfolio into any stock investment.
Good Investing,
Mike Kapsch
Article by Investment U
By TraderVox.com
Tradervox (Dublin) – The Euro is experiencing a huge sell off in opening trades of the week. The EUR/USD pair is on a strong bearish rally with new bearish positions building up. The trend is hugely in favor of the bears and this is adding up the bearish volatility numbers in the EUR/USD trade. The currency pair has been able to break the strong psychological support at the 1.29 level to fall further. This has added fuel to the market sentiment of shorting EUR/USD sending the pair to near 1.283 levels.
On the one hour chart the pair is trading well below the 20 day and 10 day moving average with a huge bearish divergence indicating a stronger bearish run is waiting. The RSI is well past the oversold levels, but this has not deterred the EUR/USD bears which continue to surge supported by the bearish momentum and the strong downwards price action.
On the fundamental side things are not so rosy in the Euro zone. The weekend saw the Greek president call all parties to form the coalition government. The pro austerity parties failed to meet substantial numbers after a number of small parties under the banner of the anti bail out Syriza party declined to join the collation government. If the parties fail to reach an agreement another election could be seen soon, which has a high probability of bringing the Syriza party to power. This has raised an uncertainty cloud over Greece, raising fears that the country may soon run out of funds and may eventually end up bankrupt. Financial markets have already began to price in a possibility of a Greek exit sending the European stocks plunging and sparking a move away from Euro denominated assets to safe haven dollar, US treasuries and German Bunds. This has led to a sharp rise in the bond yields of Spain and Italy.
In other events the euro zone industrial production contracted by 0.3 % while markets expected a revival in the production capacity by 0.4%. This was a further blow to the weak EUR/USD. Now the Euro zone seems to be stuck in spiral of deep recession, unending debt and fears of possible exit by member countries.
Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management.
Article provided by TraderVox.com
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Listen to Charles Sizemore discuss the implications of the ”London Whale” trading error that cost JP Morgan $2 billion, the state of the European debt crisis and the outlook for Canada with Dick Donahue on Wealth Wake Up radio.
To listen, click here.
Dick Donahue is the manager and owner of Asset Advisors, LLC and the host of KGMI talk radio’s popular weekend program: Wealth Wake Up with Dick Donahue.
By jw jones, Traders Video Playbook
“You can’t understand what lays ahead if you don’t understand the past”
~ Satellite, Rise Against ~
Members of my service as well as long time readers know that I do a lot of analysis based on the past. I am constantly looking at long-term historical price charts and data. As a trader, I am always looking for an edge.
Obviously the keys to long-term success involve proper position sizing, risk management mechanisms, and ultimately leveraging probability. Professional traders are masters of these tenets. These characteristics are what separate successful traders from average traders over the long haul.
Sometimes through my rigorous analysis I come across price charts and oscillators that help put together a picture that helps shape my view of the marketplace. The past few months have been some of the most difficult market conditions that I have seen in some time.
The “wall of worries” permeates the financial landscape as risk at present seems unprecedented. The list of macroeconomic concerns ranges from the European sovereign debt crisis to escalation of military action in the Middle East.
I could probably write an entire article about the various risks that plague global financial markets at present, but I try to focus on the positive in any situation. Right now remaining optimistic is a daily battle amid the constant barrage of depressed economic data. Instead of focusing on all of the various risks, I focus on finding opportunities where probabilities are favorable based primarily on historical price data, cycle analysis, and tape reading.
Back on April 9th I proffered an article that discussed my expectation that the U.S. Dollar Index would rally while risk assets such as equities and oil prices would collapse. Additionally I commented on my expectations for weakness in gold, silver, and the entire mining complex. I was wrong about the timing of the U.S. Dollar’s advance, but the ultimate price action analysis was correct.
The following quote came from that article, “As shown above, I believe that short term targets to the downside are likely somewhere in the 1,475 – 1,525 price range. I think gold will find a major bottom near these levels and a strong bounce will play out.” (Click here to view the entire article)
When I originally wrote that article referring to a decline in gold prices gold futures were trading around 1,630 an ounce. Price rallied sharply higher after my article went public, but fast forward to today and my concerns appear to be well founded. I am a long-term gold bull and I ultimately believe that new highs will occur in the future. However, gold and gold miner’s may have further to fall before they find major support.
As stated above, my original expectations for the Dollar Index did not happen in the time frame I was anticipating. However, the belief that a rally was forthcoming proved to be accurate as can be seen from the price chart of the U.S. Dollar Index shown below.
U.S. Dollar Index Daily Chart
Traders Video Analysis Chart
As can be seen above, the price action is confirming serious strength. The weekly close on Friday saw the Dollar close above a key short-term resistance level. Additionally I would point out the double bottom that has been carved out on the chart above which is also bullish. Should resistance near 80.76 give way to higher prices a test of the recent highs is quite possible.
The technical picture suggests higher prices in the near term for the greenback. From a fundamental viewpoint, recent economic data also suggests that higher prices may await as one the largest weekly debt issuance of 2012 among sovereigns within the Eurozone will transpire next week. If any of the debt auctions go poorly it will reflect negatively on the Euro currency and help push the Dollar higher.
Most of the debt issuance is outside of the 3 year maturity window so the LTRO justification to encumber risk does not apply. Next week we will find out just how serious investors are about accepting default risk on European debt instruments. I would be shocked if the ECB sits idly by, but the sheer amount of capital required to safeguard debt issuance next week is extreme, even for a major central bank.
The Euro currency continues to fall and has broken key resistance around the 1.30 price level on the EUR/USD currency pair. Price is not collapsing as of yet, but we are seeing a slow and steady slog lower for the Euro. This price action serves to boost the Dollar which ultimately places downward pressure on risk assets such as equities and oil. Additionally, it reduces the valuation of gold. The daily chart of gold futures is shown below.
Gold Futures Daily Chart
Gold Trading Video Chart
The recent price action in gold has been quite ugly and price is resting at key support stemming from an intermediate-term descending channel shown above. Should the lower bound break to the downside a sharp move lower could play out.
It is important to remember that gold is coming off a monster multi-year bull run and it only serves to make sense that a nasty pullback that shakes out the bulls would be forthcoming. I continue to believe that strong support and buyers will come back into gold around the 1,450 – 1,550 price range as significant long-term support levels should hold up prices. The key support zone is clearly illustrated in the chart above.
I continue to wait for price to reach that key support level and based on the current proximity those support levels are magnetizing price toward them. When long-term support / resistance levels are near price a test is a common occurrence. The most important question to ask is whether the support zone shown above will hold, or will even lower prices ultimately play out?
Gold and silver both are starting to become oversold on the daily time frame. While the gold bugs have been feeling pain the past few weeks, the gold miners have been taken out back to the woodshed for a good whipping. The miners have been absolutely crushed in 2012 .
My long term analysis revealed something quite extraordinary on the longer term weekly chart of the HUI gold mining index which I believe is critical for readers to watch and monitor. We are nearing valuation levels based on the true strength index that have not been seen since the market crash that took place back in 2008. The weekly chart of the gold bugs index is shown below.
Gold Bugs Index Weekly Chart
Gold HUI Trading Video Chart
As can be seen above, the Gold Bugs Index (HUI) has been under considerable selling pressure since early September of 2011. However, note how low the True Strength Index is based on 5 years of price data. We are nearing the same level that we saw back in 2008 which marked a major bottom that ultimately resulted in a monster move to the upside for the gold miners.
I am of the opinion that this chart demonstrates quite clearly that a great buying opportunity for gold, silver, and the miners is likely going to present itself in the near future. I will be watching this price relationship over the next few weeks waiting for a strong entry point for a longer-term purchase. After this pullback concludes, the potential returns that could occur in gold, silver, and the miners could be breathtaking.
With 3 clear support levels, a defined risk approach could be used in order to scale in or to reduce market risk should prices continue to move below each support level. While the time is not right just yet, more than likely a solid long-term risk / reward trade may very well present itself in the precious metals and mining space. I am likely a bit early, but the ultimate end game as it relates to fiat currency is documented throughout history. The final result has a finality that few truly comprehend.
If you enjoyed this article and analysis, you can get our detailed trading analysis videos every Sunday, Monday, Wednesday and Thursday here risk free: http://tradersvideoplaybook.com/risk-free-30-day-trial/
Happy Trading and Investing!
This material should not be considered investment advice. J.W. Jones is not a registered investment advisor. Under no circumstances should any content from this article or the OptionsTradingSignals.com website be used or interpreted as a recommendation to buy or sell any type of security or commodity contract. This material is not a solicitation for a trading approach to financial markets. Any investment decisions must in all cases be made by the reader or by his or her registered investment advisor. This information is for educational purposes only.
London Gold Market Report
from Adrian Ash
BullionVault
Mon 14 May, 08:20 EST
THE PRICE OF GOLD and gold futures dropped yet again Monday morning, recording the seventh drop in nine trading days in May so far as industrial commodities, global stock markets and the Euro currency all sank amid Athens’ failure to negotiate a new coalition government.
Silver bullion also fell hard, touching $28.44 per ounce and losing 8.9% from the start of this month.
The price of Spanish government debt today fell yet again, pushing 10-year yields above 6.2% ahead of an auction of new bonds later today.
Greek public-sector salaries and state pensions may be unpayable “from the beginning of June” says a letter from stand-in prime minister Lukas Papadimos to party leaders, republished by Ta Nea, after May’s tranche of the international bail-out was cut and tax revenues came in below target.
“We do not think the gold bull market is over,” says a note from Morgan Stanley analysts, even though “gold has moved lower and is trading at levels not seen since December 2011.”
Viewed on a technical chart analysis, “Damage has certainly been done [but] we do not think it is irreversible,” they add, pointing to a sharp rise in speculative “short selling” by gold futures traders now expecting prices to fall further.
“The last time positioning was at these levels, prices embarked on a move higher, rallying to near $1800 per ounce. We are buyers of gold here.”
The rise in speculative short-selling of gold futures is “disconcerting” however, says Marc Ground at Standard Bank, because “while investors have over the past few weeks appeared cautious of running too short on gold, this fear seems to have evaporated.”
Over in the currency markets – where the Euro fell to new 4-month lows vs. the Dollar at $1.2860 – “We continue to target $1.20 for Euro/Dollar,” says Ground’s colleague, currency strategist Steve Barrow.
“Whether this takes time, or comes in an instant, could depend on the outcome of Greece’s political impasse.”
Energy, metal and food prices all sank once more Monday morning as European stock markets lost more than 2% of their value, with Madrid losing 3% and Athens dropping 5.3%.
At the weekend Swedish central banker Per Jansson said that “of course the question [of a Greek exit] is discussed.” Irish central bank chief, and fellow European Central Bank policymaker Patrick Honohan told journalists that “technically, it can be managed.”
“We wish it to be possible for Greece to remain in the euro but Greece must live up to its commitments,” a spokeswoman for the European Commission said Monday morning.
If Greece breaches the agreed terms of its bail-out deal then staying in the Euro would be “an impossible equation and I think in that sense it is an irresponsible statement,” said Finland’s Europe minister Alexander Stubb today about the ongoing calls for an end to cuts in Athens.
German chancellor Angela Merkel meantime suffered a drubbing in a state election on Sunday, with her Christian Democratic Union drawing only 26% of the vote in North Rhine-Westphalia, giving the coalition of Social Democrats and Greens a winning majority of 50%.
Price inflation in Germany’s wholesale markets rose sharply in April, new data showed today, while industrial production across the 17-nation Eurozone fell much harder than forecast, down 2.2% year on year.
On the FX market, the Euro today hit fresh 42-month lows vs. the British Pound, but fell less quickly than gold futures or bullion, with the gold price for Eurozone buyers slipping beneath €39,100 per kilo for the first time this year.
For Indian buyers, “The weakness of the Rupee is countering the fall in the Dollar gold price,” says Jeffrey Rhodes, global head of precious metals at INTL Commodities DMCC in Dubai, speaking to the Wall Street Journal.
“That’s likely to act as a drag on demand in the world’s biggest market.”
“There is hardly any work these days,” complains a Jaipur goldsmith to The Times of India. “First the 21-day long jewelers’ strike and now the increasing gold prices have rendered us jobless.
“It is getting tough for us to survive.”
India’s imports of gold bullion fell by two-thirds last month compared with April 2011.
Gold futures on the Multi Commodity Exchange in Mumbai today slipped back to a 5-week low, down 3.3% from early May’s new all-time highs.
Gold price chart, no delay | Buy gold online at live prices
Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.
(c) BullionVault 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.
