Things are still complicated for the markets. A quick run down of the last few weeks, the financial world has turned upside down in China, the Greek crisis is disturbing the gold trade while investors flock to stocks, the Canadian mining stocks are suffering and the industry showed one of the biggest losses among several mining businesses. China’s revelation on its gold reserves did not provide the expected increase upon gold prices.
There is a few good news in the financial matter, but these are largely eclipsed by the crappy indicators occurring right now. Several of the biggest companies in the US suffered relevant losses, impacting on the Standard & Poor 500 and the Dow performances. The notable earning report from Google helped the NASDAQ good performance for the moment.
The offering conducted by many tense situations worldwide is really affecting the markets. Indexes are still down and forecasts are not quite positive. The deception caused by China’s gold reserves revelation has caused an even bigger drop in gold prices, intensifying the commodities depression.
Gold is not having a great time. The situation has to get better in concordance to the investor’s trust in the precious metal. As other commodities, the gold market is still bearish and the global panorama has to change in order to help the prices to rise. The sinking is about 3.54 percent by the moment.
Many experts and traders though that the Chinese announcement could be helpful for the precious metal price, but what happened was the opposite. The PBOC, also known as the People’s Bank of China (China’s Central Bank) finally reported their gold reserves and was highly disappointing. Since the last update in 2009, China’s gold reserves had incremented by 57 percent, way less than forecast.
With 1658 tons of gold in their reserves, China is on the fifth position in this race. Supposedly, the US is holding five times the Chinese reserves in gold, with 8133 tons since last report by the FED. Main economies in the European Union have bigger reserves than the most powerful economy in the world (China), which appears really baffling for experts.
Mr. Ross Norman, a bullion dealer at Sharps Pixley, declared that the numbers shown by China are quite small and don’t represent the magnitude of the Asian country economy. “As a country with the world’s largest economy by some measures, one would have expected they would be well north of the German Figure really”.
This appears to be the general consensus for many experts in the area. The worldwide gold reserve numbers looks like this:
– The United States with 8133 tons.
– Germany with 3383 tons.
– Italy with 2451 tons.
– France with 2435 tons.
– China with 1658 tons.
Even France and its small economy have great advantage here. These China numbers became really disappointing for experts and investors, creating more depression for the commodity. The low performance of several mining enterprises around the world is not helping recovery either. The stock market collapse in China and the sudden demand fall for gold is hitting the precious metal continually.
The Greece crisis was expected to help the hard asset because was supposed that investors would deny the Euro and search for a safe-haven investment as the gold. Forecasts failed once more
Despite this, EU is having increases on its construction indicators. After falling in April, May showed a good gain in this matter. Tense negotiations with Greece didn’t affect all the investment fronts in the European continent after all. The Greek bank will open tomorrow again and the bailout is on the rails. If the markets don’t fall in a panic, it’s possible to improve some of the important indexes any time soon.