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
If You Don’t Understand Bonds, You Don’t Understand Investing - 25th Aug 19
Gold's Next Move - 25th Aug 19
Fresh Water Crisis Unfolding - 25th Aug 19
Newbie Guide to Currency Pairs in Forex Trading – Review - 25th Aug 19
When A 16-Year-Old Earns $3 Million, You Know It's Not A 'Silly Fad' - 24th Aug 19
The Central Bank Time Machine - 23rd Aug 19
Stock Market August Breakdown Prediction and Analysis - 23rd Aug 19
U.S. To “Drown The World” In Oil - 23rd Aug 19
Modern Monetary Theory Could Destroy America - 23rd Aug 19
Seven Key Words That Explain "Stupidly High" Bond Market Prices - 23rd Aug 19
Is the Fed Too Late Prevent A US Housing Bear Market? - 23rd Aug 19
Manchester Airport FREE Drop Off Area Service at JetParks 1 - Video - 23rd Aug 19
Gold Price Trend Validation - 22nd Aug 19
Economist Lays Out the Next Step to Wonderland for the Fed - 22nd Aug 19
GCSE Exam Results Day Shock! How to Get 9 A*'s Grade 9's in England and Maths - 22nd Aug 19
KEY WEEK FOR US MARKETS, GOLD, AND OIL - Audio Analysis - 22nd Aug 19
USD/JPY, USD/CHF, GBP/USD Currency Pairs to Watch Prior to FOMC Minutes and Jackson Hole - 22nd Aug 19
Fed Too Late To Prevent US Real Estate Market Crash? - 22nd Aug 19
Retail Sector Isn’t Dead. It’s Growing and Pays 6%+ Dividends - 22nd Aug 19
FREE Access EWI's Financial Market Forecasting Service - 22nd Aug 19
Benefits of Acrobits Softphone - 22nd Aug 19
How to Protect Your Site from Bots & Spam? - 21st Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 21st Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 21st Aug 19
The Gold Rush of 2019 - 21st Aug 19
How to Play Interest Rates in US Real Estate - 21st Aug 19
Stocks Likely to Breakout Instead of Gold - 21st Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 21st Aug 19
Holiday Nightmares - Your Caravan is Missing! - 21st Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19

Market Oracle FREE Newsletter

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

Gold Follows Stocks Higher on Increased Risk Appetite

Commodities / Gold & Silver 2009 Jul 15, 2009 - 10:53 AM GMT

By: Adrian_Ash


The PRICE OF PHYSICAL GOLD pushed higher once more early Wednesday, rising to its best level since July 2nd at $938 an ounce as world stock market also rose yet again and the United States reported faster-than-expected consumer price inflation.

Frankfurt's Dax index of German stocks gained nearly 2% despite worsening jobless data. Government bond prices fell, pushing yields higher, as US crude oil contracts moved north of $60 per barrel.

Both the Pound and the Euro also rose against the Dollar, breaking two-week highs, but gold rose faster still, hitting £571 for UK investors – towards the upper-end of gold's recent two-month trading range vs. Sterling.

Eurozone investors now Ready to Buy Gold also saw the price rise to a one-week high, adding 0.6% to €664.50.

Against the Japanese Yen the Euro was little changed near ¥131.

"Gold registered an up day for the fourth day in a row," notes Scotia Mocatta's technical analysis of Tuesday's action, citing "good buying" as the price closed London trade at $924 – "where the 100-day moving average lies."

"The money pumped into economies by governments around the world is likely to support various asset price bubbles across global markets in coming years," says Bill O'Neill, portfolio strategist at Merrill Lynch Global Wealth Management, speaking to the UK's CityWire.

"The fact is that gold is a good hedge against the legacy effects of governments throwing vast sums at the [crisis] issue."

Tuesday saw the Chicago Mercantile Exchange (CME) – the world's No.1 derivatives platform – announce clearing services for London's over-the-counter gold forward contracts.

Calling it a "direct response to customers' need for a secure way to manage counterparty credit exposure," the CME will begin clearing forward contracts – which operate just like Gold Futures, agreeing a delivery date and price for some time in the future, but without a formal exchange platform – on August 23rd.

"Investment demand for gold has been strong and anything that helps make the market more liquid and reduces counterparty risk is a positive," says James Steel, head of precious metals analysis at HSBC.

Mumbai's National Multi-Commodity Exchange (NMCE) is also extending its services in gold, it said today, launching a "gold mini contract" by the end of next month.

On the supply side, meantime, yesterday's failed negotiations for a 10% hike in South African gold miners' wages could see the National Union of Mineworkers "escalate" the dispute with strike action from next week.

"Levels of risk aversion remain as volatile as financial markets," says the MKS Finance division of the Swiss refining group today. "Optimism can easily reverse if upcoming earnings or economic announcements prove disappointing.

"Thus gold's range may have broadened, but no exciting break outs have occurred as yet."

Wednesday brought news of a greater-than-expected 5% drop in June sales for H&M, the world's third largest clothes retailer.

Employment in German manufacturing fell at its fastest pace in 5 years in May, new data showed, while the total number of unemployed people in the UK jumped by a quarterly record between Feb. and May, taking the jobless rate up to 7.6%.

Including those inactive workers who say they want to be in work, the jobless rate rose to 13.4%.

Including bonuses, pay growth in the private sector slipped to 1.9%, but rose to 3.5% for public sector staff.

Average weekly earnings across the whole UK economy peaked in February 2008, both in nominal and real terms. Since then, adjusted for inflation, average earnings have fallen by one eighth.

Over in the United States, June's consumer-price data showed a sharper-than-forecast rise of 0.7% month-on-month.

That cut the annualized fall to 1.4% from 1.6% expected. Excluding volatile food and fuel prices, the CPI rose 1.7% last month from a year earlier.

Meantime in Beijing, the Chinese authorities said the country's foreign reserve holdings jumped at a record pace in the second quarter of this year, breaking above $2 trillion.

Far outstripping China's export income and foreign direct investment flows, the Financial Times notes, the jump shows speculative "hot money" flowing into the fast-growing emerging giant.

"The same expectations of a Renminbi appreciation will start to accumulate all over again," said one un-named Beijing economist.

"China's foreign exchange reserve headache has returned," says Stephen Green for Standard Chartered in Shanghai.

By Adrian Ash

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 , 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 - 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