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
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
U.S. Long Bond: Let's Review the "Upward Point of Exhaustion" - 27th Jun 20
Gold, Copper and Silver are Must-own Metals - 27th Jun 20
Why People Have Always Held Gold - 27th Jun 20
Crude Oil Price Meets Key Resistance - 27th Jun 20
INTEL x86 Chip Giant Stock Targets Artificial Intelligence and Quantum Computing for 2020's Growth - 25th Jun 20
Gold’s Long-term Turning Point is Here - 25th Jun 20
Hainan’s ASEAN Future and Dark Clouds Over Hong Kong - 25th Jun 20
Silver Price Trend Analysis - 24th Jun 20
A Stealth Stocks Double Dip or Bear Market Has Started - 24th Jun 20
Trillion-dollar US infrastructure plan will draw in plenty of metal - 24th Jun 20
WARNING: The U.S. Banking System ISN’T as Strong as Advertised - 24th Jun 20
All That Glitters When the World Jitters is Probably Gold - 24th Jun 20
Making Sense of Crude Oil Price Narrow Trading Range - 23rd Jun 20
Elon Musk Mocks Nikola Motors as “Dumb.” Is He Right? - 23rd Jun 20
MICROSOFT Transforming from PC Software to Cloud Services AI, Deep Learning Giant - 23rd Jun 20
Stock Market Decline Resumes - 22nd Jun 20
Excellent Silver Seasonal Buying Opportunity Lies Directly Ahead - 22nd Jun 20
Where is the US Dollar trend headed ? - 22nd Jun 20
Most Shoppers have Stopped Following Supermarket Arrows, is Coughing the New Racism? - 22nd Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Gold Jumps as Bernanke Speaks, Long Dull Summer Nears Its End

Commodities / Gold & Silver 2009 Aug 21, 2009 - 08:29 AM GMT

By: Adrian_Ash

Commodities

THE PRICE OF GOLD leapt towards the start of New York trade on Friday, adding $10 inside five minutes and reversing the last fortnight's drop as European shares rose to fresh 10-month highs.

Unwinding all of August's 2.3% loss above $955 an ounce, gold also rose against the other major currencies,  hitting one-week highs for Japanese, Euro and UK investors.


Chinese stocks rallied once more, but held 15% below their peak of Aug. 4th. Crude oil rose back above $73 per barrel.

Federal Reserve chairman Ben Bernanke was due to open the Jackson Hole central-banking retreat just before US trading began.

"We believe there is once again some risk aversion creeping back into the market," says Walter de Wet at Standard Bank today.

"This could support the Dollar at current levels around $1.4300 against the Euro...[but] it should also support Gold."

"There's been a lot of investment demand recently," claimed a trader to Reuters this morning. "The reallocation of investors portfolios is still taking place and overall this is still favourable for gold."

So far this summer, however, lower volatility in the Gold Price has matched lower trading volumes in other financial markets.

Total volume at the New York and American stock exchanges fell to 4.41 billion shares on Wednesday, according to the Wall Street Journal, "down 16.2% from the 65-day average."

Gold dealing volumes in London – heart of the world's Gold Bullion market, where next weekend's Bank Holiday will mark the end of the vacation season – fell last month by half as much again as the typical June-to-July drop, down by 13.6% on London Bullion Market Association clearing stats.

The Gold Price in Euros has meantime become less volatile than at any time since May 2005 – and with the Dollar-Gold Price closely mapping the Euro/Dollar exchange rate, it's been less than half as volatile as gold priced in Dollars on a daily basis since the start of this month.

In the 10 weeks since June 8th, the Dollar Gold Price traded in a 7.4% range (some $67 an ounce). Gold priced in Euros has moved inside a 4.0% band (just €26 per ounce).

"[Gold has become] about as interesting as watching the Moody Blues in concert," says the anonymous London hedge-fund manager at the Fintag blog today.

"The waiting is the hardest part," writes a Canadian investment advisor in the Financial Post, calling 2009 "an exercise in frustration and puzzlement."

On the political front, meanwhile, Zimbabwe central-bank chief Gideon Gono yesterday proposed "the guarded reintroduction of the Zimbabwe Dollar where such a new currency will be fully backed by credible, tangible and locally available assets, such as gold, diamonds or platinum, among several other possibilities."

Since abandoning the Zimbabwean Dollar and switching to foreign currencies in July, the domestic economy has seen price-inflation fall from 231,000,000% per year to 1% month-on-month.

Russia's central bank – which chose to deny on Thursday that it's planning to devalue the Rouble any further, after watching it slide by one-third during the global financial crisis to date – yesterday reported a sharp increase in its Gold Bullion reserves.

Buying 13 tonnes of gold in July, an increase of some 3.7% from a month earlier, the Bank of Russia has grown its gold holding to 567 tonnes, the tenth largest in the world and larger by almost one-half from five years ago.

"I do not think [Gold] will replace everything else," said Russian finance minister Arkady Dvorkovich earlier this summer when asked about the Kremlin's policy on foreign reserves. "It would be naive and unjustified.

"But the growing role of gold amid the crisis could be a topic of discussions in the near future."

Opening the annual summit of central bankers at Jackson Hole, Wyoming today, US Fed chairman Ben Bernanke entitled his speech "Reflections in a Year of Crisis".

Two years after the global financial crisis began in Aug. 2007, new data from the Mortgage Bankers Association yesterday showed 13.2% of US mortgages are now either a month or more overdue, or in foreclosure, up from 9% this time last year.

Prime loans to lower-risk home buyers have risen from 44% of foreclosure starts to 58%. Prime fixed-rate mortgages, seen as the lowest-risk loans, accounted for one-third of foreclosure proceedings between April and July, compared with one-fifth during the same period in 2008.

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