Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20
Does the Stock Market Really "See" the Future? - 12th Sept 20
Basel III and Gold, Silver and Platinum - 12th Sept 20
Tech Stocks FANG Index Nearing Critical Support – Could Breakout At Any Moment - 12th Sept 20
The Tech Stocks Quantum AI EXPLOSION is Coming! - 12th Sept 20
AMD Zen 3 Ryzen 4000 Questions Answered on Cores, Prices, Benchmarks and Threadripper Launch - 12th Sept 20
The Inflation Mega-trend is Going Hyper! - 11th Sep 20
Gold / Silver Ratio: Slowly I Toined… - 11th Sep 20
Stock Market Correction or Reversal? The Jury Isn't Out! - 11th Sep 20
Crude Oil – The Bearish Outlook Remains - 11th Sep 20
Crude Oil Breaks Lower – Sparking Fears Of Another Sub $30 Price Collapse - 11th Sep 20
Inflation by Fiat - 10th Sep 20
Unemployment Rate Drops. Will It Drag Gold Down? - 10th Sep 20
How Does The Global Economy Recover After This Global Pandemic? - 10th Sep 20
The Best Mobile Casino - 10th Sep 20
QE4EVER! - 9th Sep 20
AMD Ryzen Zen 3 4800x 10 Core 5ghz CPU, Cinebench Benchmark Scores (Est.) - 9th Sep 20
Stock Traders’ Dreams Come True – Big Technical Price Swings Pending on SP500 - 9th Sep 20
Should You Be Concerned About The Stock Market Big Downside Rotation? - 9th Sep 20
Options Traders Keep "Opting" for Even Higher Stock Market Prices - 8th Sep 20
Gold Stocks in Correction Mode - 8th Sep 20
The law of long-term time preference and Gold ownership - 8th Sep 20
Gold Bull Markets: History and Prospects Ahead - 8th Sep 20
Sheffield City Centre Coronavirus Shopping Opera Ahead of Second Covid-19 Peak - 8th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Gold Surges on Flight to Safety

Commodities / Gold & Silver 2009 Sep 04, 2009 - 08:14 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD slipped from Thursday's 6-month high of $999.50 an ounce today, dipping 1% as the US reported fewer job losses than analysts forecast for August but unemployment still rose to a fresh 26-year high of 9.7%.


The Gold Price in Euros had touched €699 overnight, its best intra-day level since April 2nd, before dipping to €696. UK investors wanting to Buy Gold saw the price hold above £605 an ounce, its best level since early June.

The US Dollar meantime rose on the currency markets, nearing the long Labor Day weekend higher vs. the Euro from last Friday.

European stock markets bounced 1.2% from their mid-week sell-off. Gold priced in Dollars stood 3.3% higher from this time last week.

"The exciting part of this Gold up-move," says Scotia Mocatta, "is that it comes without US Dollar weakness."

"There has been a flight out of risky assets into Gold as a safe haven," reckons Peter Fertig of Quantitative Commodity Research in Germany, speaking to Bloomberg. "It's been out of stocks."

"Also providing support to Gold Prices are reports coming out of China that the country's main sovereign wealth fund, the China Investment Corporation (CIC), is under pressure to cross-hedge its US Dollar exposure by investing more funds into gold and oil," says Walter de Wet at Standard Bank.

"How quickly this transition takes place, if at all, is open for debate. However, it has boosted sentiment."

More cautious still, "We expect the Gold Price to trend lower to end-2009," says David Moore at Commonwealth Bank of Australia, "and to continue to drift lower over the course of 2010 as investor interest wanes."

Industry analysts attributed this week's sharp gains – the strongest since the last week of May '09 – to "large fund buying", with rumors in New York of an un-named player buying 5,000 Comex contracts, worth some half-billion dollars.

Thursday saw the SPDR Gold ETF, listed in New York but storing in London, add 471,000 ounces – its sharpest increase since reaching an all-time record of 1,134 tonnes hit on June 1st.

Overall, open interest in the US Gold Futures market has jumped more than 8% in the last eight days' trading.

That compares with 2009's average weekly increase – in those weeks when open interest has grown – of 3.1%.

World stock markets meantime pushed higher on Friday, cutting this week's losses on London FTSE100 in half.

Crude oil rose, but agricultural commodities fell back after two months of strong gains on news of good US harvests.

Government bond prices slipped, pushing interest rates for new buyers higher, with 10-year German Bund yields rose to 3.37%.

Yesterday the European Central Bank held its key interest rate at 1.0% and announced a second unlimited offer of 12-month banking loans at that record low price.

June's offer saw the ECB – which denies the policy is "quantitative easing" – lend €442 billion to Eurozone banks, equal to almost 5% of annual GDP.

"Financial markets will probably remain in this sweet spot for some time," reckons Riccardo Barbieri, head of international economics at Bank of America Securities-Merrill Lynch.

"The economic data have almost uniformly surprised on the upside, [yet] the leading central banks have credibly signaled to the markets that monetary conditions are set to remain extremely accommodative."

Ahead of this weekend's G20 summit of political leaders in London, an open letter from UK premier Brown, German chancellor Merkel, and French president Sarkozy says that while "there is no alternative to the policy measures adopted to fight the crisis...we should work on exit strategies to be implemented...as soon as the crisis has ended."

"Note that an exit strategy is not identical to a particular course of action," said ECB chief Jean-Claude Trichet in a speech this morning. "Rather, it lays out a framework and set of principles to govern actions in the face of circumstances in whatever form they take.

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