![[Most Recent Quotes from www.11.com.my]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif)
Fire up the Money Printing, Gold & Silver Sentiment Tumbles.
>> Friday, October 14, 2011
October 9th, 2011
At a press conference this weekend, German Chancellor Angela Merkel and French President Nicholas Sarkozy attempted to assure markets that European leaders are prepared to do whatever it takes to stabilize the European banking system. Merkel stated, "We're determined to do everything necessary to ensure the recapitalization of our banks." Sarkozy told the press corps, "By the end of the month, we will have responded to the crisis issue and to the vision issue."
Last Thursday, the Bank of England announced it would re-start its quantitative easing program, pledging to purchase an additional $116 billion in government debt. With the nation's raft of austerity programs weighing on economic growth, the central bank is attempting to prevent another recession. Confidence in global financial markets has waned as sovereign debt worries intensified over the past few months. Stock prices have fallen for five consecutive months and commodity prices have slid 20% off their 2011 highs. The interconnected nature of the banking system has fueled concerns that a Greek default will spawn a 2008-style financial crisis.
Last week, Belgian-French bank, Dexia, saw its share price plummet and was eventually halted after it appeared to be on the verge of collapse. This weekend a plan was crafted to dismantle the bank in an orderly manner. The failure of Dexia, which was leveraged over 100 times, may be the catalyst that leads European leaders to sign a blank check in order to prevent another banking crisis. Policy makers must assure markets that the crisis will not spread to Spain and Italy. Doing this will require massive bank re-capitalizations and a "bazooka" filled with money. A potential deflationary depression outcome must be taken off the table.
If policy makers do act more forcefully, it is likely that gold prices will resume their upward trend. While a test of the recent low cannot be ruled out, the correction lows may be in place. In the near-term, gold's 50-day moving average of $1,755 per ounce may act as upside resistance, while on the downside, the 200-day moving average of $1,539 per ounce should be strong support.
Gold & Silver Sentiment Tumbles
The most recent Market Vane bullish consensus figures for gold and silver stand at 66% and 52%, respectively. Furthermore, the speculative net-long position in COMEX gold futures is sitting at levels last seen in May 2009. Large commercial traders in silver futures on the COMEX have reduced their short positions to the lowest level in roughly eight years.
The dismal sentiment picture presents a more constructive short- and intermediate term outlook for both gold and silver prices. The fourth quarter is a seasonally strong period for gold prices. Barring a further convulsion in stock and commodity markets on the back of a systemic shock, the price of gold appears poised to move higher heading into 2012.
Read more...
At a press conference this weekend, German Chancellor Angela Merkel and French President Nicholas Sarkozy attempted to assure markets that European leaders are prepared to do whatever it takes to stabilize the European banking system. Merkel stated, "We're determined to do everything necessary to ensure the recapitalization of our banks." Sarkozy told the press corps, "By the end of the month, we will have responded to the crisis issue and to the vision issue."
Last Thursday, the Bank of England announced it would re-start its quantitative easing program, pledging to purchase an additional $116 billion in government debt. With the nation's raft of austerity programs weighing on economic growth, the central bank is attempting to prevent another recession. Confidence in global financial markets has waned as sovereign debt worries intensified over the past few months. Stock prices have fallen for five consecutive months and commodity prices have slid 20% off their 2011 highs. The interconnected nature of the banking system has fueled concerns that a Greek default will spawn a 2008-style financial crisis.
Last week, Belgian-French bank, Dexia, saw its share price plummet and was eventually halted after it appeared to be on the verge of collapse. This weekend a plan was crafted to dismantle the bank in an orderly manner. The failure of Dexia, which was leveraged over 100 times, may be the catalyst that leads European leaders to sign a blank check in order to prevent another banking crisis. Policy makers must assure markets that the crisis will not spread to Spain and Italy. Doing this will require massive bank re-capitalizations and a "bazooka" filled with money. A potential deflationary depression outcome must be taken off the table.
If policy makers do act more forcefully, it is likely that gold prices will resume their upward trend. While a test of the recent low cannot be ruled out, the correction lows may be in place. In the near-term, gold's 50-day moving average of $1,755 per ounce may act as upside resistance, while on the downside, the 200-day moving average of $1,539 per ounce should be strong support.
Gold & Silver Sentiment Tumbles
The most recent Market Vane bullish consensus figures for gold and silver stand at 66% and 52%, respectively. Furthermore, the speculative net-long position in COMEX gold futures is sitting at levels last seen in May 2009. Large commercial traders in silver futures on the COMEX have reduced their short positions to the lowest level in roughly eight years.
The dismal sentiment picture presents a more constructive short- and intermediate term outlook for both gold and silver prices. The fourth quarter is a seasonally strong period for gold prices. Barring a further convulsion in stock and commodity markets on the back of a systemic shock, the price of gold appears poised to move higher heading into 2012.
