There are a number of reason Asian currencies have been falling recently, with the most obvious being expectations the Federal Reserve will raise interest rates in the latter part of 2015.
Other factors attributed to weaker Asian currencies include pressure from local businesses, demand for electronics gadgets fell, MERS, funds pulling money from emerging markets, Japanese yen, and a potential Greek default. I'll break down how these are having an effect country-by-country in a moment.
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Showing posts with label Interest Rates. Show all posts
Showing posts with label Interest Rates. Show all posts
Monday, June 15, 2015
Monday, March 21, 2011
Goldman (GS) Sees Gold Price Peak in 2012
Over the next three months, investment bank Goldman Sachs (NYSE:GS) said they see the price of gold rising to about $1,480 and jumping to about $1,690 over the next 12 months.
After that the giant bank said they see interest rates in the U.S. kicking in around that time, which should put downward pressure on prices.
Goldman said in a note, "Given the decline in U.S. real interest rates, we see the recent retracement in gold prices as offering a good buying opportunity, and maintain our long gold trading recommendation as we expect gold to rally to our three-month price target of $1,480 an ounce."
For the next 6 months Goldman sees gold prices rising to $1,565 an ounce.
"Optimism over the state of the global economic recovery at the start of the year, which drove U.S. real interest rates sharply higher, has been tempered by the ongoing events in the Middle East and North Africa and Japan...setting the stage for the next gold price rally," Goldman concluded.
After that the giant bank said they see interest rates in the U.S. kicking in around that time, which should put downward pressure on prices.
Goldman said in a note, "Given the decline in U.S. real interest rates, we see the recent retracement in gold prices as offering a good buying opportunity, and maintain our long gold trading recommendation as we expect gold to rally to our three-month price target of $1,480 an ounce."
For the next 6 months Goldman sees gold prices rising to $1,565 an ounce.
"Optimism over the state of the global economic recovery at the start of the year, which drove U.S. real interest rates sharply higher, has been tempered by the ongoing events in the Middle East and North Africa and Japan...setting the stage for the next gold price rally," Goldman concluded.
Wednesday, December 8, 2010
Gold Prices Today Plunge on China Tightening Expectations
The volatility connected to gold prices continues as they fell again today, this time on worries over how far China will go to battle its inflation challenges. Gold prices today have plummeted on the concerns, with spot gold down by $17.40, to $1,383.70 an ounce as of 1:45 PM EST, according to Kitco.
Gold prices have become more volatile than usual because of competing economic events affecting it.
Along with China's inflation battle, there is the quantitative easing of the Federal Reserve, value of the U.S. dollar, the sovereign debt crisis in Europe, global economy and interest rates. All of which push against one another to influence gold prices.
When one dominates the news, the price of gold swings one way or the other in response. Investors are attempting to figure out which way the overall sector will go as the events unfold.
Commodities in general will continue to respond in a similar fashion, although you have the supply/demand element included with those that isn't as influential with the prices of gold.
None of this changes the longer term prospects for the price of gold, but it appears it'll be a jagged gold price ride on the upward journey.
Gold prices have become more volatile than usual because of competing economic events affecting it.
Along with China's inflation battle, there is the quantitative easing of the Federal Reserve, value of the U.S. dollar, the sovereign debt crisis in Europe, global economy and interest rates. All of which push against one another to influence gold prices.
When one dominates the news, the price of gold swings one way or the other in response. Investors are attempting to figure out which way the overall sector will go as the events unfold.
Commodities in general will continue to respond in a similar fashion, although you have the supply/demand element included with those that isn't as influential with the prices of gold.
None of this changes the longer term prospects for the price of gold, but it appears it'll be a jagged gold price ride on the upward journey.
Monday, December 6, 2010
Goldman (NYSE:GS) Likes Gold on Low Interest Rates
Believing interest rates in the U.S. will remain low for some time, Goldman Sachs (NYSE:GS) sees gold continuing to rise in price for 2011, along with other commodities, including oil.
They recently stated the believe gold will continue to rise through 2012, probably peaking at somewhere around $1,750 an ounce. That's hard to believe in light of the Federal Reserve continuing to inflate the money supply and doing nothing to alleviate the recession and little or no job creation.
Goldman sees gold futures rising to $1,690 an ounce by the end of 2011.
Much is this assumes the American economy will recover, which is a huge leap of faith in light of what's happening around the world, which should take years to work its way out; including the sovereign debt crisis in Europe, which most of us will probably find out is much worse than being revealed.
As for oil futures, Goldman sees them rising to about $105 a barrel in 2011, with increasing demand during the year.
Goldman said, "Energy is historically the best performing sector when the ISM is above 50, which seems increasingly likely given strong October ISM and our US economists upgrade to their 2011 growth outlook."
They recently stated the believe gold will continue to rise through 2012, probably peaking at somewhere around $1,750 an ounce. That's hard to believe in light of the Federal Reserve continuing to inflate the money supply and doing nothing to alleviate the recession and little or no job creation.
Goldman sees gold futures rising to $1,690 an ounce by the end of 2011.
Much is this assumes the American economy will recover, which is a huge leap of faith in light of what's happening around the world, which should take years to work its way out; including the sovereign debt crisis in Europe, which most of us will probably find out is much worse than being revealed.
As for oil futures, Goldman sees them rising to about $105 a barrel in 2011, with increasing demand during the year.
Goldman said, "Energy is historically the best performing sector when the ISM is above 50, which seems increasingly likely given strong October ISM and our US economists upgrade to their 2011 growth outlook."
Tuesday, November 23, 2010
Goldman (NYSE:GS) Says Take Long Position in December 2011 COMEX Gold Contract
Goldman Sachs (NYSE:GS) said recently traders should take a close look at entering a long position on December 2011 COMEX contract for gold.
According to Goldman's projections, gold, which closed at over $1,365 an ounce for spot gold Monday, should increase by over 20 percent over that mark in 2011, with estimates of $1,650 an ounce on the precious metal.
The giant financial institution said the reasoning behind their $1,650 an ounce figure is TIPS falling under 50 basis points at the 10-year mark.
That means lower interest rates will help push gold prices higher in 2011, according to Goldman, although there are a number of factors which support those conclusions as well.
According to Goldman's projections, gold, which closed at over $1,365 an ounce for spot gold Monday, should increase by over 20 percent over that mark in 2011, with estimates of $1,650 an ounce on the precious metal.
The giant financial institution said the reasoning behind their $1,650 an ounce figure is TIPS falling under 50 basis points at the 10-year mark.
That means lower interest rates will help push gold prices higher in 2011, according to Goldman, although there are a number of factors which support those conclusions as well.
Wednesday, November 17, 2010
Alcoa (NYSE:AA), Freeport (NYSE:FCX), Southern Copper (NYSE:SCCO) Drop on China Worries
Commodity equities are taking a big hit from speculation swirling around the high probability that China may increase interest rates to battle inflation, hitting share prices of mining companies like Alcoa (NYSE:AA), Freeport (NYSE:FCX) and Southern Copper (NYSE:SCCO) hard.
Alcoa weighed heavily on the down, as it dropped close to three percent in Tuesday trading.
China's consumer price index increased to 4.4 percent, much higher than expected, generating the concern over the middle kingdom raising interest rates.
That was also exacerbated by South Korea increasing interest rates by 25 basis points to 2.50.
Alcoa closed Tuesday at $13.03, losing $0.37, or 2.76 percent. Southern Copper was down to $42.43, falling $1.27, or 2.91 percent. Freeport plummeted to $97.61, plunging by $4.39, or 4.30 percent, as a number of the commodities the produce were under pressure, including gold and copper.
Alcoa weighed heavily on the down, as it dropped close to three percent in Tuesday trading.
China's consumer price index increased to 4.4 percent, much higher than expected, generating the concern over the middle kingdom raising interest rates.
That was also exacerbated by South Korea increasing interest rates by 25 basis points to 2.50.
Alcoa closed Tuesday at $13.03, losing $0.37, or 2.76 percent. Southern Copper was down to $42.43, falling $1.27, or 2.91 percent. Freeport plummeted to $97.61, plunging by $4.39, or 4.30 percent, as a number of the commodities the produce were under pressure, including gold and copper.
Friday, November 12, 2010
Gold Prices Today Plummet on China Interest Rate Concerns
With interest rates being one of the keys to the price movement of gold, gold prices today responded to the news China may combat battle its inflation by raising its interest rates by plunging over $40 an ounce.
With the price of gold continuing to rise almost unabated, it does show those who aren't looking at the underlying support for strong gold prices are jittery, and as mentioned, target interest rates as one of their key metrics as to move in or out of gold.
All of this is based on speculation which evidently was spurred by the consumer price index in China, which increased by 4.4 percent, a rate higher than expected.
Part of what has happened is traders are attempting to lock in their profits and also raise cash in order to cover their margins in other investment areas. Again, these are traders and not gold investors moving the price of gold, and that's when we always get the biggest swings in gold prices.
This happens on a cyclical basis in the economic climate we're in, as worried speculators sell their long positions in gold in order to cover their losses in other sectors.
It's anyone's guess as to whether or not gold will enter a significant period of correction, but that should be considered a buying opportunity, not a reason to get out of the sector.
With the price of gold continuing to rise almost unabated, it does show those who aren't looking at the underlying support for strong gold prices are jittery, and as mentioned, target interest rates as one of their key metrics as to move in or out of gold.
All of this is based on speculation which evidently was spurred by the consumer price index in China, which increased by 4.4 percent, a rate higher than expected.
Part of what has happened is traders are attempting to lock in their profits and also raise cash in order to cover their margins in other investment areas. Again, these are traders and not gold investors moving the price of gold, and that's when we always get the biggest swings in gold prices.
This happens on a cyclical basis in the economic climate we're in, as worried speculators sell their long positions in gold in order to cover their losses in other sectors.
It's anyone's guess as to whether or not gold will enter a significant period of correction, but that should be considered a buying opportunity, not a reason to get out of the sector.
Thursday, October 7, 2010
Citigroup (NYSE:C) Raises Gold Estimate to $1,450
Citing expected quantitative easing, which is another word for inflation, to be instituted by the Federal Reserve, Citigroup (NYSE:C) sees gold prices over the near and medium term to rise to $1,450 an ounce.
That is based on the accurate assumption the value of the U.S. dollar and other currencies will fall against gold as they continue to be debased from the faulty policies of their central banks.
Gold, as expected, is experiencing a pullback today as it had been moving up at unsustainable levels, where investors were over-pricing the future into the precious metal.
Gold for immediate delivery did surge earlier in the session to $1,364.77 before falling back.
Whatever type of correction may come, it's largely irrelevant for gold investors, as there is absolutely nothing in the way at this time which will change the support underlying the surge in gold prices.
News of the ongoing sovereign debt crisis in Europe being worse than being spun by the mainstream media is part of that support for gold, along with expected inflation, weakening currencies, low interest rates, and numerous other factors.
A basket of currencies falling against the price of gold is among the more important supports that will continue because of the enormous printing of money.
That is based on the accurate assumption the value of the U.S. dollar and other currencies will fall against gold as they continue to be debased from the faulty policies of their central banks.
Gold, as expected, is experiencing a pullback today as it had been moving up at unsustainable levels, where investors were over-pricing the future into the precious metal.
Gold for immediate delivery did surge earlier in the session to $1,364.77 before falling back.
Whatever type of correction may come, it's largely irrelevant for gold investors, as there is absolutely nothing in the way at this time which will change the support underlying the surge in gold prices.
News of the ongoing sovereign debt crisis in Europe being worse than being spun by the mainstream media is part of that support for gold, along with expected inflation, weakening currencies, low interest rates, and numerous other factors.
A basket of currencies falling against the price of gold is among the more important supports that will continue because of the enormous printing of money.
Friday, October 1, 2010
Gold Prices Shine for Eighth Straight Quarter
For the eighth quarter in a row gold prices have ended in positive territory, as everything which supports gold remains in place.
Adding to the recent push is the realization we're still in a recession, and a long way from emerging from it. That means the inevitable interference of the government via quantitative easing, where they waste money by attempting to throw it at the problem again, even after close to $2 trillion has already been pumped into it.
That means the continuing debasing of the U.S. dollar and the resultant increase in gold prices.
Gold for the month of September rose over five percent as it broke records in eleven of the last thirteen trading days.
Another major factor in gold price support is interest rates, and along with the Federal Reserve, the Bank of Japan and Bank of England have signaled they're unlikely to make any major moves to increase them any time soon.
The sovereign debt crisis in Europe, which has been trying to be hidden by the media, or taken at face value from the mouths of politicians that things aren't as bad as they seem, is in reality again being seen as a disaster, as this time Ireland battles to manage its huge debt load.
These and other important elements continue to provide healthy soil for gold to grow in.
Other than raising interest rates, there's nothing that can be done to change these circumstances in the short term, and that guarantees gold prices are far from ending their bull run.
Adding to the recent push is the realization we're still in a recession, and a long way from emerging from it. That means the inevitable interference of the government via quantitative easing, where they waste money by attempting to throw it at the problem again, even after close to $2 trillion has already been pumped into it.
That means the continuing debasing of the U.S. dollar and the resultant increase in gold prices.
Gold for the month of September rose over five percent as it broke records in eleven of the last thirteen trading days.
Another major factor in gold price support is interest rates, and along with the Federal Reserve, the Bank of Japan and Bank of England have signaled they're unlikely to make any major moves to increase them any time soon.
The sovereign debt crisis in Europe, which has been trying to be hidden by the media, or taken at face value from the mouths of politicians that things aren't as bad as they seem, is in reality again being seen as a disaster, as this time Ireland battles to manage its huge debt load.
These and other important elements continue to provide healthy soil for gold to grow in.
Other than raising interest rates, there's nothing that can be done to change these circumstances in the short term, and that guarantees gold prices are far from ending their bull run.
Monday, September 20, 2010
Barclays (NYSE:BCS) Sees Gold Remaining Strong in Fourth Quarter
With fundamentals expected to remain in place, Barclays (NYSE:BCS) believes gold will continue to perform strongly in the fourth quarter.
Barclays said “we maintain our view for the fourth quarter of this year to be the strongest quarter on record yet for gold prices, with downside corrections finding support from the seasonally strong period for fabrication demand with the forthcoming wedding and festival season in key gold-consuming countries.”
Several reasons were cited by the financial firm, including expected continuation of quantitative easing, ongoing low interest rates, and gold miners continuing to abandon their hedge books.
Gold broke all-time records several times last week, and some are saying it could hit $1,300 this week if quantitative easing is mentioned by the Federal Reserve.
Barclays said “we maintain our view for the fourth quarter of this year to be the strongest quarter on record yet for gold prices, with downside corrections finding support from the seasonally strong period for fabrication demand with the forthcoming wedding and festival season in key gold-consuming countries.”
Several reasons were cited by the financial firm, including expected continuation of quantitative easing, ongoing low interest rates, and gold miners continuing to abandon their hedge books.
Gold broke all-time records several times last week, and some are saying it could hit $1,300 this week if quantitative easing is mentioned by the Federal Reserve.
Tuesday, March 16, 2010
Gold Prices Surge by $21
Gold Prices and Interest Rates
Gold prices increased as much as $21 today, reaching $1,128 an ounce in anticipation of the Federal Reserve keeping interest rates where they were, which highly favors gold prices and gold futures.
Now it will be interesting to see if gold pushes past these barriers and maintains its move upward.
Fundamentals continue to reward gold because of ongoing monetary policies form central banks and governments around the world which are hammering the value of their currencies, making gold a currency, and the most trustworthy one, in the minds of investors and those seeking safety from inflation and risk.
Gold Prices and Interest Rates
Gold prices increased as much as $21 today, reaching $1,128 an ounce in anticipation of the Federal Reserve keeping interest rates where they were, which highly favors gold prices and gold futures.
Now it will be interesting to see if gold pushes past these barriers and maintains its move upward.
Fundamentals continue to reward gold because of ongoing monetary policies form central banks and governments around the world which are hammering the value of their currencies, making gold a currency, and the most trustworthy one, in the minds of investors and those seeking safety from inflation and risk.
Gold Prices and Interest Rates
Gold Futures Surge on Interest Rates Staying the Same
Gold futures and Interest Rates
Gold futures rose early in the session and held their gains after the Federal Reserve announced it wouldn't be increasing interest rates at this time.
Gold futures had risen in anticipation there would be no surprises from the Fed, as most feel the earliest increase in interest rates will be later in the year.
The U.S. dollar will remain under downward pressure while gold could resume on a significant upward trend because of everything favoring it as far as monetary policy goes, and the resultant concerns over inflation and risk.
Gold futures and Interest Rates
Gold futures rose early in the session and held their gains after the Federal Reserve announced it wouldn't be increasing interest rates at this time.
Gold futures had risen in anticipation there would be no surprises from the Fed, as most feel the earliest increase in interest rates will be later in the year.
The U.S. dollar will remain under downward pressure while gold could resume on a significant upward trend because of everything favoring it as far as monetary policy goes, and the resultant concerns over inflation and risk.
Gold futures and Interest Rates
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