The Daily Nugget – China picks up and the gold price does too

Catch up with the day’s events with Jan Skoyles’s gold investment news, The Daily Nugget, discussing the gold price and what’s happening to help you invest in gold. 

This morning gold is at a three-week high, and may possibly make its first weekly gain for four weeks, by the end of the day. Technical analysts expect to see the gold price rise to $1,749 during the day.

Gold-backed exchange traded funds have once again been hitting records, on Tuesday holdings rose to a record high of 75.133 million ounces.

A Bloomberg survey found 25 out of 33 analysts were bullish on an increase in the gold price next week. This is likely thanks to further speculations that Obama and the Fed will continue with stimulus measures and do little to rein in the deficit.

Yesterday the Bank of England decided to hold back on another round of quantitative easing, stopping asset purchases for just the third time since the crisis began.

As the Telegraph said, ‘never has such a non-event, had such a big build up.’ Many believed we would see more printing, but it seems the Bank may have had a change of heart when it comes to QE. Chitter chatter in recent weeks has suggested current members and influencers outside the MPC are losing faith in QE in its current form.

That is, of course, not to say that they will suddenly embark on reining in all this extra money. They will find other ways to ‘stimulate’ the economy, but the point is that they are thinking about the implications of how they are implementing policies. Unfortunately disappointing data in the future will soon prompt further easing measures.

The ECB also disappointed the markets yesterday when they decided to refrain from further stimulus measures. Little more can be done for Greece (enough has been done already in our opinion) and Spain was disappointed to not hear any reassurances of lower borrowing costs. According to Draghi the Eurozone’s troubled countries are poised for recovery…but no-one lese seemed to agree. Most notably, the European Commission had, just days before, cut growth forecasts for the area.

Eurozone economic sentiment also contradicted Draghi, it worsened going into the fourth quarter as ‘public budget deficits’ were cited as the biggest worry by those expert respondents to the Ifo Institute survey.

China is having their monthly data dump today. Chinese retail sales, investment and industrial production all increased in October prompting beliefs that the world’s second largest economy is coming to the end of its two year slowdown.

In a report this morning from Hu Jintao’s congress, much focus is placed on the economy and the successes achieved. Future plans include doubling incomes, which is expected to benefit 600 million people. Let’s hope this is done by growing the country’s productive ability. It’s all very well giving people more money, but it means nothing if there is nothing of any value being produced.

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Please Note: Information published here is provided to aid your thinking and investment decisions, not lead them. You should independently decide the best place for your money, and any investment decision you make is done so at your own risk. Data included here within may already be out of date.