Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24
RECESSION When Yield Curve Uninverts - 8th Sep 24
Sentiment Speaks: Silver Is Set Up To Shine - 8th Sep 24
Precious Metals Shine in August: Gold and Silver Surge Ahead - 8th Sep 24
Gold’s Demand Comeback - 8th Sep 24
Gold’s Quick Reversal and Copper’s Major Indications - 8th Sep 24
GLOBAL WARMING Housing Market Consequences Right Now - 6th Sep 24
Crude Oil’s Sign for Gold Investors - 6th Sep 24
Stocks Face Uncertainty Following Sell-Off- 6th Sep 24
GOLD WILL CONTINUE TO OUTPERFORM MINING SHARES - 6th Sep 24
AI Stocks Portfolio and Bitcoin September 2024 - 3rd Sep 24
2024 = 1984 - AI Equals Loss of Agency - 30th Aug 24
UBI - Universal Billionaire Income - 30th Aug 24
US COUNTING DOWN TO CRISIS, CATASTROPHE AND COLLAPSE - 30th Aug 24
GBP/USD Uptrend: What’s Next for the Pair? - 30th Aug 24
The Post-2020 History of the 10-2 US Treasury Yield Curve - 30th Aug 24
Stocks Likely to Extend Consolidation: Topping Pattern Forming? - 30th Aug 24
Why Stock-Market Success Is Usually Only Temporary - 30th Aug 24
The Consequences of AI - 24th Aug 24
Can Greedy Politicians Really Stop Price Inflation With a "Price Gouging" Ban? - 24th Aug 24
Why Alien Intelligence Cannot Predict the Future - 23rd Aug 24
Stock Market Surefire Way to Go Broke - 23rd Aug 24
RIP Google Search - 23rd Aug 24
What happened to the Fed’s Gold? - 23rd Aug 24
US Dollar Reserves Have Dropped By 14 Percent Since 2002 - 23rd Aug 24
Will Electric Vehicles Be the Killer App for Silver? - 23rd Aug 24
EUR/USD Update: Strong Uptrend and Key Levels to Watch - 23rd Aug 24
Gold Mid-Tier Mining Stocks Fundamentals - 23rd Aug 24
My GCSE Exam Results Day Shock! 2024 - 23rd Aug 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Marks Time Ahead of Seasonally Bullish Period

Commodities / Gold & Silver 2009 Aug 14, 2009 - 06:57 AM GMT

By: Adrian_Ash

Commodities

THE PRICE OF PHYSICAL GOLD pushed back up to $959 an ounce Friday lunchtime in London, a little higher for the week as European stock markets touched new 10-month highs and crude oil moved back above $71 a barrel.


Silver broke new two-month highs at $15.00 an ounce. Government bond prices held firm after yesterday's strong auction of 30-year US Treasury debt.

"We're approaching a seasonally bullish time for Gold," notes Colin Abrams at South African news-site MiningMX.com.

"Historically – over decades – there's been a strong tendency for the Gold Price to rally in the six-month period between September and February."

Research from BullionVault published by the Financial Times late last month shows that a summer dip in the Gold Price – followed by strong gains to finish the year higher than it began – has been the most common seasonal pattern since 1969.

Repeated 20 times across the last four decades, this pattern gave UK investors buying the summer low an average 13.7% gain by the following Feb.

"The Gold market is quiet," said Walter de Wet at South Africa's Standard Bank early Friday.

"We will look at [today's] US industrial production growth figures to see whether demand from the industrial sector is improving. Note that after the 15 months of de-stocking by US businesses in 2001, there was a period of massive commodity demand.

"Should growth figures show a marked improvement, inflationary expectations may also climb faster."

Today in Tokyo – where Japanese Gold Futures ended the week almost 2% lower as the Yen rose on the currency market – minutes from the Bank of Japan's latest showed policy-makers debated further credit and cash injections to try and depress the currency to revive the economy.

"Another extension [of monetary stimulus] might become necessary," Board members said.

Last week the Bank of England surprised UK analysts by raising its Quantitative Easing program from £125 billion to £175bn of newly-created Pounds Sterling.

In Washington this week, the Federal Reserve extended until October its $300bn program of Treasury-bond purchases.

"The most important demand driver from the Gold Investment side, the Gold ETFs, is non-existent," noted Eugen Weinberg at Commerzbank this morning. "The ETF has been experiencing outflows recently."

New York's SPDR Gold Trust, the world's largest Gold ETF, has now reported lower gold holdings for eight weeks running, down more than 6% from June's record high of 1,134 tonnes.

The fund's largest shareholder, however – John Paulson's $35 billion hedge fund – continued to hold the $2.9bn position it took between Jan. and April during the second quarter of 2009, official filings show.

Paulson, who also acquired a 2% stake in Bank of America between April and July, saw the value of his fund's gold and Gold Mining investments rise by more than two-fifths last quarter, says Barron's magazine, rising further to $5.5bn by Thursday's close.

"The topside [in Gold] seems to be constrained at $960 on a closing basis," says a short-term technical note from Scotia Mocatta. "Downtrend resistance currently comes in $969.75, with a break of that leading to a $980 target."

Meantime on the supply side, gold output in South Africa – formerly the world's No.1 producer nation – fell more than 12% in June from a year earlier, contrasting with a 6.4% drop in non-gold mineral output.

US Gold Mining giant Newmont Mining today said its US$2.9bn Boddington mine in Western Australia is now in production, processing 100,000 tonnes of ore during the first two weeks of August and on target to "become a cornerstone asset in our portfolio," according to president and CEO Richard O'Brien.

Globally, however, new gold discoveries continue to lag production, shrinking the below-ground assets of the mining industry.

Between 1992 and 2005, according to research from Metals Economics Group, world output totaled 1.1 billion ounces. New discoveries of large reserves – judged at 2 million ounces or more – were barely half that size.

The last major find was in 2007 and there were none in 2008. A decade earlier, says MEG, the gold-mining industry made 15 large-scale discoveries per year.

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

© 2005-2022 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