Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19
It’s Not Technology but the Fed That Is Taking Away Jobs - 16th May 19
Learn to Protect your Forex Trading Capital - 16th May 19
Gold Ratio Charts Offer The Keys to the Bull Market - 16th May 19
Is Someone Secretly Smashing the Stock Market at Night? - 16th May 19
Crude Oil Price Fails At Critical Fibonacci Level - 15th May 19
Strong Stock Market Rally Expected - 15th May 19
US China Trade Impasse Threatens US Lithium, Rare Earth Imports - 15th May 19
Gold Mind Reader's Guide to the Global Markets Galaxy: 'Surreal' - 15th May 19
Trade Wars and Other Black Swan Threats to Your Investments - 15th May 19
Our Long-Anticipated Gold Momentum Rally Begins - 15th May 19
Defense Spending Is Recession Proof - Defense Dividend Stocks - 15th May 19
US China Trade Issues Will Drive Market Trends – PART II - 14th May 19
The Exter Inverted Pyramid of Global Liquidity Credit risk, Liquidity and Gold - 14th May 19
Can You Afford To Ignore These Two Flawless Gold Slide Indicators? - 14th May 19
As cryptocurrency wallets become more popular, will cryptocurrencies replace traditional payments? - 14th May 19
How US Debt Will Reach $40 Trillion by 2025 - 14th May 19
Dangers Beyond a Trade War with China - 14th May 19
eBook - Greatest Tool for Trading? - 14th May 19
Classic Pitfalls for Inexperienced Traders - 14th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Gold Rallies with Stocks Stocks as Goldman Earnings Boost Risk Appetite

Commodities / Gold & Silver 2009 Jul 14, 2009 - 08:16 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD jumped to a one-week high of $926 Tuesday lunchtime in London, ticking back with world stock markets and non-US currencies after US retail sales and producer-price inflation both showed a sharper than expected recovery.


Asian stock markets reversed Monday's 2% losses, while European shares unwound July's losses to date.

Gold Prices had already leapt 1.6% as London trade drew to a close on Monday, rising as US equities jumped 2.5% for the session after banking analyst Meredith Whitney upgraded her view of Goldman Sachs ahead of the investment bank's second-quarter earnings report.

Widely accused of rigging the financial markets and government bail-outs of the last two years to its advantage, Goldman Sachs today reported a 46% increase in year-on-year earnings, beating Wall Street expectations by almost 40%.

Today's Financial Times says Goldman executives sold $700 million worth of its stock even as the bank received $10bn in tax-payer funds between Sept. and April.

"We are going to see very good numbers not just from Goldman," said one Swiss find manager to Bloomberg this morning. "There has been such a lack of competition" in finance.

Stock-broker Charles Schwab is due to report its second-quarter earnings tomorrow (Weds), with investment-bank J.P.Morgan and fund-managers BlackRock reporting on Thursday.

Bank of America, expected to see its April-June earnings drop by two-thirds, will report before the opening bell on Friday.

"Stronger equity markets have been the main driver behind the base metals on Tuesday morning," says a note from Standard Bank's commodity team.

"Also supporting  commodity prices has been a sharp fall in the VIX [volatility] index, suggesting that risk appetite is on the increase again."

Oil meantime broke back above $60 per barrel Tuesday morning, while natural gas added almost 3%.

Non-US currencies also pushed higher vs. the Dollar and Yen on Tuesday morning, taking the Euro above $1.40 and ¥130.50.

But gold rose faster still, holding above £567 an ounce for UK investors and nearing €662 for Eurozone buyers.

Across the last 40 years, Gold Prices have displayed a near-perfect non-correlation with the S&P 500 index on average. On a statistical basis, their monthly changes show a correlation coefficient of almost precisely zero.

If gold and stocks moved in lock-step, that figure would read +1.0, whilst a perfect inverse correlation would read minus one.

But moving together so far this month, however – and also breaking from their near-perfect non-correlation since Jan. 2008 – daily changes in the Gold Price now show a closer relationship with US equities than during their joint bull move of 2004-to-end-2007.

Since then, the Gold Price has added 15% for US investors. The S&P index of US stocks has lost more than one-third of its value – dropping below and staying below the price of gold for the first time in 17 years in November '08.

Over on the economic front early Tuesday, the UK Consumer-Price Index came in bang on analyst forecasts for June, rising 1.8% from a year earlier but slowing from May's 2.2% rise.

The old Retail Price Index – which also includes mortgage interest and housing costs – fell by a record 1.6% for the year as UK residential real estate lost 12.5% on the government's official data.

Eurozone and US consumer-price inflation figures for June are due on Wednesday. Today's US Retail Sales data showed a surprise 0.6% rise last month from May.

Producer Prices for US manufacturers rose 1.8% month-on-month.

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