USAGOLD afternoon snapshot

Morning Snapshot

Feb 2nd, 2012 13:02 by News

 

02-Feb (USAGOLD) — Gold extended to new 9-week highs, putting important chart/Fibonacci resistance at 1762.70/1768.43 to the test amid persistent uncertainty emanating from Europe and more dire assessments about the US economy from Fed chairman Ben Bernanke.
There is still no deal with Greece’s private bondholders, despite assurance yesterday that an agreement was expected with hours. Whether there is ultimately a deal or not, Greece will be in default and everyone knows it. The whole charade with private bondholders voluntarily swapping debt is provide a pretense to not trigger credit default swaps. That begs the question: What’s the point of having insurance against a sovereign default if policymakers are going to go through such wild gyrations to ensure that they never get triggered?
Fed chairman Bernanke spoke before the House Budget Committee this morning, making note of the “frustratingly slow” pace of the US recovery. He went on to express his concerns about current fiscal policies that he said, “based on plausible assumptions” could lead to “the structural budget gap increasing significantly further over time and the ratio of outstanding federal debt to GDP rising rapidly.” He called that dynamic “clearly unsustainable.”
The Bernanke Fed has directly contributed more than $110 to the gold price in the last week, with the FOMC statement that extended ZIRP guidance into late-2014 and initiated inflation targeting, through today’s testimony. With the door open for further asset purchases and projections of persistent weakness in the economy to provide the cover for such actions, the long-term uptrend in gold seems to be re-exerting itself.
• US initial jobless claims -12k to 367k for the week ended 28-Jan, just below expectations of 370k, vs upward revised 379k in previous week.
• US Q4 productivity +0.7%, below market expectations of +0.9%, vs +2.3% in Q3.
• Eurozone PPI-0.2% in Dec, below market expectations of -0.1%, vs +0.2% in Nov; 4.3% y/y.
• UK CIPS Construction PMI fell to 51.4 in Jan, below market expectations of 53.5, vs 53.2 in Dec.