Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Market Dow 30k before End of 2020? - 13th Jul 20
Credit Market Investments Turned Into End-User Risk Again - 13th Jul 20
Investors Are Going All-In on This Coronavirus Proof Industry - 13th Jul 20
5 Vital Insights That You Can Gain From Instagram Trackers - 13th Jul 20
Stop Believing The 'Economy' Is The Same As The Stock Market - 12th Jul 20
Spotify Recealed as The “Next Netflix” - 12th Jul 20
Getting Ahead of the Game: What Determines the Prices of Oil? - 12th Jul 20
The Big Short 2020 – World Pushes Credit/Investments Into Risk Again - 11th Jul 20
The Bearish Combination of Soaring Silver and Lagging GDX Miners - 11th Jul 20
Stock Market: "Relevant Waves Vs. Irrelevant News" - 10th Jul 20
Prepare for the global impact of US COVID-19 resurgence - 10th Jul 20
Golds quick price move increases the odds of a correction - 10th Jul 20
Declaring Your Independence from Currency Debasement - 10th Jul 20
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Gold Rally Corrects After Strong Bull Run

Commodities / Gold & Silver 2009 Jun 03, 2009 - 06:01 AM GMT

By: Adrian_Ash

Commodities

THE PRICE OF PHYSICAL gold dropped 1.5% from new 14-week highs in lunchtime trading in London on Wednesday, turning higher from $975 per ounce as equity markets fell and the US Dollar rallied on the foreign exchanges.


"Higher interest rates would pose a risk to gold, but higher interest rates aren't going to happen," said Frank Holmes of US Global Investors in opening the World Mining Investment Congress in London on Tuesday – "much reduced in size this year from last" according to one delegate at the $6,000 event.

"If you are not long, you are going to be wrong on gold. Longer term, governments will do everything to print money and gold will slowly become an important asset class worldwide."

Today French, German and Italian investors now Ready to Buy Gold saw the price hold below €690 an ounce as the single currency retreated from a new 2009 high vs. the Dollar above $1.43.

The Gold Price in Sterling – trending lower since peaking at £700 an ounce on Feb. 20th – meantime flirted with 7-week lows near £590 after the British Pound leapt yet again on the currency market.

Hitting fresh 7-month highs above $1.66 to the Dollar, Sterling has gained more than a fifth from February's two-decade low.

"We have clearly had a case of selective myopia," writes Steve Barrow, currency strategist at Standard Bank in London, "where the market has ignored all the bad news about the UK and, instead, focused only on whatever crumbs of comfort that there have been."

Pointing to the net "short" position held by currency speculators still betting that the Pound will fall, Barrow repeats his call for $1.82 within a year – and perhaps "a lot sooner than we think" – because "the market is still not back to a more neutral position for Sterling."

Over in the commodities market on Wednesday, US crude oil futures moved sideways just north of $68 per barrel – a level first broken in Aug. '05 and more than 50% below last June's top – while copper prices at the London Metal Exchange eased back from yesterday's new 7-month highs.

Commodity specialists Platts report that copper traders from China – likely to remain a net importer in 2009 and buoyed by government stockpiling - have been offering to sell metal onto Japanese buyers after prices broke above $5,000 per tonne.

"China's steel industry will soon be swamped with raw material," the newswire goes on, quoting the China Mining Association's fear of 200-300 million tonnes of excess iron ore if recent stockpiling isn't unwound.

China imported more than 443m tonnes of iron ore in 2008, well over half of total global deliveries.

But "If [Asian central banks] make a loss, it's okay," said a source quoted by Reuters today.

"As long as they are sticking to the policy imposed from the very top, they are not concerned with short-term gains...They are not competing against mutual funds or hedge funds."

Speaking on condition of anonymity after US Treasury secretary Tim Geithner's series of meetings in Beijing this week, "The US Treasury bond is a partnership the Chinese government holds," the source went on.

China's central bank grew its stockpile of US government debt by 56% in the last year to $768 billion, says the newswire.

"What other central banks have been doing must be reversed," said German chancellor Angela Merkel, at a conference in Berlin on Tuesday.

"I am very skeptical about the extent of the Fed's actions and the way the Bank of England has carved its own little line in Europe."

The Federal Reserve has almost trebled its balance-sheet in the last 12 months, buying and lending against mortgage-backed and commercial-loan securities that were otherwise untradable.

Also slashing its interest rate to near-zero, the Bank of England has embarked on £125 billion of "quantitative easing" in the UK economy, effectively creating money to buy government debt, and covering well over 65% of this year total state spending.

"Even the European Central Bank has somewhat bowed to international pressure with its purchase of covered bonds," Merkel went on.

"We must return to independent and sensible monetary policies, otherwise we will be back to where we are now in 10 years' time."

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