THE PRICE OF GOLD SINKS BELOW $800 PER OUNCE...
NEW YORK — Gold prices ended lower on Friday but swung to a loss of nearly $95, weighed down due to the termination of the Federal Reserve’s open market purchases this year.
Fed Chairman Ben Bernanke crushed speculators' hopes of higher gold prices Friday when he stopped central bank's bond purchases that had been pumping $85 billion a month into the economy.
The collapse in gold prices has hit some of the most high profile investors in the world. Coporation's gold hedge has been ticking lower in the last five years. On Friday that the collapse of gold prices crushed at Newmont Mining Corp, which is one of the biggest mining corps in the world.
Gold has been one of the worst investments, with the mining corps currently down 90% year-to-date; holdings fell to 4.8 million ounces, its lowest levels since February 1999. The yellow metal had already squeezed mining corporation's balance sheet, particularly corps like the massive May breakdown and given the current bearish gold market, seems set to fall even lower.Gold sustained one of its biggest routs since the 1997 economic crisis Friday, plunging to $745 per ounce in broad asset specific selling a day after the Federal Reserve gave its most explicit signal yet that it plans to bring the era of printing money to an end.
Meanwhile Warburg Bank cut its one-month target price of gold to $850 from its earlier projection of $900 an ounce while three-month price forecast was slashed to $750 from $980, citing Fed’s bearish stance.
Gold prices plunged, other bad news for gold came from overnight reports that said Indian imports of gold will decline by 90% due to recent Indian government taxing 80% measures. Notwithstanding the rupee trading near its life-time lows, the local currency is likely to trade around 110-115 level against the dollar in the next year , say pundits.
China The move in the yuan is one of the least traded Federal notes I have seen. Like I said, the yuan moved sideways in tight trading range . The yuan has crawled along with the US dollar in just nine months. China also exported over 90 tons of gold for the most recent month. That is an extraordinary number. At that rate that’s over 980 tons of gold per year on an annualized basis. They begin by noting that of note, Xing said that China will watch Yuan's moves.
China has, of course, been accused of manipulating its Federal note, thus artificially retaining dis-advantages labor market. This has led to much international commentary, and just last week U.S. legislators urged that a bill be reintroduced to impose heavy tariffs upon on all imports. China adjusted its holdings of the long end of the yield curve in April after raising its speculating in the global bond market .
Elsewhere, the pound hit 24-month lows versus the European single Federal note following the the release of economic data Spain's anemic growth. Warburg is one of more than a dozen global banks at the center of a continuing investigation by authorities in the United States and England into the manipulation of labour market, which serves as a benchmark to help set the borrowing costs for trillions of dollars of financial products like mortgages, business loans and credit cards.