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 Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

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

Gold Sets New Monthly Record High

Commodities / Gold & Silver 2009 Sep 30, 2009 - 08:20 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD moved back above $1000 an ounce Wednesday morning in London, heading for its best-ever monthly average in Dollar as the US currency lost 3.5% of its forex value from the end of August.

Asian shares finished the day higher, but Tokyo's Nikkei's closed September down 2.5% on the month.


An IMF report claimed that "Risks to the global financial system have subsided as a result of unprecedented policy actions and a nascent global economic recovery", but European stock markets gave back early gains despite news of a drop in German unemployment.

Government bonds also ticked lower. Crude oil jumped towards $68 per barrel.

"[Next month's] corporate earnings are likely to show the banks' financial conditions are far from good enough to fix investor confidence," says Koichiro Kamei, head of Market Strategy Institute in Tokyo, speaking this morning to Reuters.

"That means the Federal Reserve's easy policy is unlikely to end any time soon, resulting in a weak Dollar, inflation woes and – therefore – a buy for gold."

After achieving two three-day runs above $1000 an ounce in September, the London Gold Fix was set this morning at $1001.25.

That took gold's monthly average to a new all-time record above $996 per ounce, some 2.9% higher than the previous monthly high of March 2008.

On a three-month basis, gold was set to end the third quarter of 2009 almost 8% better against the Dollar, rising for the fourth quarter running and putting in its strongest performance since Jan-March '08.

"Currencies continue to drive the gold and silver markets," says one London dealer in a note.

"The Dollar is a key driving force for gold," agrees a Korean futures trader, speaking to Bloomberg.

For both UK and Eurozone investors, however, the gold price averaged its best price this month since the record peak of Feb-March, adding 2.8% and 6.3% respectively against Euros and Sterling from August.

September's new Dollar record saw gold's average price rise 5.0% on the month.

"The fundamentals, particularly reduced crisis-driven investment demand, do not suggest the gold price will sustain the push through $1,000," cautions the latest quarterly outlook from Australia's Resource Capital Research.

In June, CRC forecast a six-month range for gold of $900 to $1000.

"We [now] see more risk on the downside towards $900 an ounce if equity markets continue to rally. Inflation is not yet real enough to be a sustained driver of gold.

"That is expected in second-half 2010."

Contrasting current gold coin and small-bar demand with the "safe haven" buying of late 2008 and early '09, the latest Refining Monitor from Mitsui's London office reports depressed levels of sentiment amongst the fabricators it surveyed in August.

The lack of strong physical gold-buying was matched, however, by much smaller inflows of scrap metal – primarily from consumers selling old, broken and unwanted jewelry – than at the previous $1,000 price-level in Feb.

"The price of gold jewelry has risen beyond the reach of the common people," says one Bangladeshi housewife seeking a wedding gift for her daughter, quoted today by The Daily Star.

"Except for weddings, people – and especially the middle class – do not buy gold jewelry."

Across the border in India – where the Nifty stock index today rose 1.5% to close at a 52-week high – gold imports fell for the fifth month running in September, according to the Bombay Bullion Association.

"Overall imports will be less than last year as prices are still too high," reckons BBA vice-president Harmesh Arora, speaking to Bloomberg.

Totaling some 50 tonnes this month – down four tonnes from Sept. last year – gold imports to India, formerly the world's No.1 private buyer of physical metal, may drop by three-quarters in full-year 2009 compared with the 759-tonne peak 2007.

For developed-world investors, in contrast, "Western governments are carrying out an unparalleled experiment with their public finances," says William Brockhurst, manager of the private-client Cheviot Balanced Fund in London.

"Gold remains the ultimate store of value and the only truly safe currency out there [and] now looks like an opportune time to buy," he writes for CityWire.

"The Chinese authorities recently started running adverts extolling the advantages of owning gold. China’s biggest bank, the ICBC, has set up a division to cater to increasing demand."

Analysis by BullionVault shows that, over the last 10 years, the proportion of annual savings put into gold by Chinese households has almost doubled to 1.8%, even as those savings have swelled by 260%.

"If gold investment is set to become the next craze for 1.3 billion Chinese people," says Brockhurst, "we'd like some in our portfolios first."

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