Gold Bullion Slips Again from ‘MAJOR’ Hurdle of 2011 Downtrend as IMF Raises Global GDP Forecasts
Gold Bullion Slips Again from ‘MAJOR’ Hurdle of 2011 Downtrend as IMF Raises Global GDP Forecasts by Adrian Ash – Financial Sense
Gold bullion priced in Dollars retreated on Wednesday from its second attempt in 3 days to break the 6-year downtrend starting at 2011’s record peak, as world stock markets and commodities steadied after yesterday’s drop amid a higher outlook for world economic growth from the IMF.
Analysts at Germany’s Commerzbank last week called the $1291 level, where gold’s 2011 downtrend now comes in, “MAJOR resistance”.
Falling back $8 per ounce to $1284, gold bullion fell harder in other currencies’ terms as the US Dollar slipped on the FX market.
London’s FTSE-100 bucked the rally in Western stock markets and fell again as the UK Parliament voted on Prime Minister May’s call for a snap election in June – widely seen as a vote on her approach to Brexit – making it the worst-performing major index of the last month outside Japan.
“Momentum in the global economy has been building since the middle of last year,” says the Washington-based International Monetary Fund’s latest forecast today, raising its 2017 global GDP prediction to 3.5% growth.
All regions are then forecast to see stronger growth again in 2018 except the Eurozone, UK, and Japan.
The single Euro currency today touched a new April high near $1.0737, knocking the price of gold bullion for German, French and Italian back below €1200 per ounce – a 7-month high when broken last week.
Forecast meantime to follow last year’s 18% drop in GDP with a 7.4% drop in 2017, Venezuela must not be allowed to swap its remaining 187 tonnes of gold for cash in a deal with Wall Street banks, says a letter to several top lenders from the Latin American country’s National Assembly President Julio Borges.
With inflation hitting 800% this New Year and daily protests against the elected Socialist government of Victor Maduro now turning violent, “I have the obligation to warn you that by supporting…a gold swap you would be taking actions favoring a government that’s been recognized as dictatorial by the international community,” Borges tells Goldman Sachs, Citi, and other leading US investment banks.
Now with around $7.7 billion of bullion – moved in 2011 from London to Caracas by late Socialist leader Hugo Chavez amid threats of international sanctions against his expropriation of foreign-owned assets – Venezuela currently holds just $10.3bn in total central bank FX reserves, a 15-year low according to Bloomberg.