Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Stock Market Increasing Technical Weakness - 22nd July 19
What Could The Next Gold Rally Look Like? - 22nd July 19
Stock Markets Setting Up For A Volatility Explosion – Are You Ready? - 22nd July 19
Anatomy of an Impulse Move in Gold and Silver Precious Metals - 22nd July 19
What you Really need to Know about the Stock Market - 22nd July 19
Has Next UK Financial Crisis Just Started? Bank Accounts Being Frozen - 21st July 19
Silver to Continue Lagging Gold, Will Struggle to Overcome $17 - 21st July 19
What’s With all the Weird Weather?  - 21st July 19
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Gold Near 6-Week High as Bond-Insurer Defaults Hit Court

Commodities / Gold & Silver 2009 May 14, 2009 - 01:39 PM GMT

By: Adrian_Ash

Commodities

THE SPOT PRICE of gold ticked $5 lower from yesterday's 6-week high early in London on Thursday, holding flat for non-Dollar investors as world equities fell and the US currency bounced on the forex market.


New data showed US factory-gate prices rising 0.3% month-on-month in April. Both initial and continuing jobless claims for last week rose sharply ahead of expectations.

US crude oil futures meantime dropped 2% to $56.90 per barrel, while government bond prices rose, pushing 10-year US Treasury yields down to a two-week low of 3.04%.

"Gold is currently just above last week's high," says Scotia Mocatta in a client note today, "[but] it quickly ran out of steam after trading through $930.00 as dealers took profit, pushing it lower.

"Perhaps it is just a question of time before gold jumps higher. Our bullish gold view has been working in what has been a low volatility environment."

The London market-maker repeats its short-term target of $966 per ounce, with a trailing-stop now at $906. Standard Bank's commodity team today pegged gold support between $917 and $920, with resistance at $930 and $938.

"Gold Prices have been stabilising at relatively high levels, slowing fresh investment," said a Japanese smelting-group's trader to Reuters this morning.

Tokyo Gold Futures closed Thursday ¥38 lower per gram at ¥2,857, down 1.6% from Monday's opening but 42% above last Oct.'s three-year low.

"For Gold Prices to break above recent ranges," the trader added, "there has to be some fresh news about economic turmoil."

Today the Belgian government offered to guarantee 90% of a possible €15 billion loss at banking and insurance group KBC, hit by a €3.6bn loss for Jan-April on derivatives linked to MBIA – the US "monoline" bond insurance company which in turn underwrites KBC's own investments.

Yesterday 18 large financial institutions filed a law-suit against MBIA in New York, accusing it of illegally avoiding its commitments after the global credit crisis of 2008.

Last month, Wells Fargo filed a complaint against bond insurer XL Capital Assurance after it missed $5.5m of payments.

"There are investors out there who rely on the payments from bond insurers," the FT today quotes a 'source'.
"Now that one bond insurer has stopped paying, they are worried that others will, too. It is causing a lot of concern."

Here in London last week, Barclays Bank – which has not applied for any state-aid to date – said it expects insurance payments to cover 76% of its "impaired assets".

Yet Royal Bank of Scotland – now two-thirds owned by the UK tax-payer – believes its insurers will cover only 35% of its losses.

A British subsidiary of monoline bond-insurance giant Ambac Financial is meantime seeking $1 billion in damages from investment bank J.P.Morgan, accusing it of buying "inappropriate securities" with Ambac's money, including high-risk mortgage-backed securities.

"It's a sham. The banks are insolvent. The US government is trying to sedate the public because they are down to the last $100 billion of the $700bn TARP funds," said Mark Patterson, chairman of distressed private-equity firm MatlinPatterson Advisers at a conference in Qatar yesterday.

"The taxpayers ought to know that we [as distressed-investment buyers] are in effect receiving a subsidy. They put in 40% of the money but get little of the equity upside."

Meantime in Detroit, auto-makers Chrysler and General Motors were reported to be dropping 3,000 dealerships between them, around one-third of their total network.

In the UK, telecoms group BT today announced 15,000 job losses and a 60% cut to its annual dividend.

Japanese consumer electronics giant Sony Corp. today reported its first annual loss in 14 years at ¥98.5 billion ($1bn).

"By illegally subsidising its exports through the undervaluation of its currency," say the sponsors of a new bi-partisan US bill, "China has distorted their gains from trade, created barriers to free and fair trade, harmed US industries and destroyed millions of US jobs."

Aiming to impose import tariffs against Chinese goods, the bill alleges that the Chinese Yuan is 40% over-valued vs. the Dollar, swelling the US trade deficit and helping Beijing accumulate more than $1 trillion in US Treasury debt.

By Adrian Ash
BullionVault.com

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
City correspondent for The Daily Reckoning in London and a regular contributor to MoneyWeek magazine, Adrian Ash is the editor of Gold News and head of research at www.BullionVault.com , giving you direct access to investment gold, vaulted in Zurich , on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2009

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Adrian Ash Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules