Market Nuggets: Deutsche Bank: ‘Low Probability’ European Officials Would Use Gold For Debt Crisis
21 October 2011, 10:45 a.m.
By Kitco News
http://www.kitco.com/
(Kitco News) -Deutsche Bank doubts European officials will use gold holdings for programs to deal with the continent’s sovereign-debt crisis. “In the past, gold has been a useful asset for European governments as they attempted to reduce budget deficits and outstanding debt levels in the run-up to EMU entry, which was assisted by profit transfers from central banks to national governments when gold was valued at market prices rather than book value,” the bank says. “However, we attach a low probability of European officials using gold reserves in the context of the euro crisis. Gold holdings are still in the possession of national governments but are ring-fenced from the authorities by the eurosystem. Moreover, in terms of valuation, euro-area gold holdings represent little more than 6% of public debt outstanding.”
By Allen Sykora of Kitco News; asykora@kitco.com
Deutsche Bank: Gold May Trade Sideways Next Two Months21 October 2011, 11:03 a.m.
By Kitco News
http://www.kitco.com/
(Kitco News) -Deutsche bank says gold may trade sideways for a while, as was the case with silver when it corrected last spring. Gold corrected sharply lower in September. “We expected the events in the gold market might replicate what occurred in the silver market earlier in 2011,” the bank says. “Indeed when silver prices corrected by 30% in the second quarter of this year, prices then traded broadly sideways for two months. We expect a similar fate threatens the near-term outlook for gold.” For the rest of this year and next, Deutsche Bank has not revised its gold forecasts listed in a weekly commodities report. It looks for $1,750 an ounce in the current quarter. For the four quarters of 2012, it looks for $1,750, $1,850, $2,000 and $2,000, with a full-year 2012 forecast of $1,900.
By Allen Sykora of Kitco News; asykora@kitco.com
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