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
Trump Stocks and Crypto Mania 2025 Incoming as Bitcoin Breaks Above $100k - 8th Dec 24
Gold Price Multiple Confirmations - Are You Ready? - 8th Dec 24
Gold Price Monster Upleg Lives - 8th Dec 24
Stock & Crypto Markets Going into December 2024 - 2nd Dec 24
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Bid Back Above $1,000 Despite Dollar Rally

Commodities / Gold & Silver 2009 Oct 01, 2009 - 08:17 AM GMT

By: Adrian_Ash

Commodities

THE PRICE OF GOLD opened the fourth quarter of 2009 above $1000 an ounce on Thursday, holding onto yesterday's 1.5% gain as equities dropped worldwide and the US Dollar rose on the forex market.

Government bonds were flat. Crude oil retreated from Wednesday's jump above $70 per barrel.



"Despite Dollar strength today, gold remains well bid above $1,000 this morning," says Walter de Wet at Standard Bank. "We view this as very supportive of gold, but support comes mainly from investment demand.

"Physical demand [primarily for jewelry] remains limited."

"[Gold's] key $990 support level has held three times (on the New York close) over the past week," notes the latest technical analysis from Scotia Mocatta.

"The inability to move lower opens up the topside resistance levels of 1019 and 1024. While above 990 we believe the risk is a move to the 2008 high of 1032."

"The next huge step would be the all-time high we saw last year," agreed another trader this morning, speaking to Reuters.

"We've moved on either side of $1,000 in the last two weeks so I don't think this is an important barrier anymore."

UK investors now looking to buy gold saw the price move to fresh 6-month highs in early London trade, touching £632 an ounce as the British Pound held below $1.60 on the foreign exchanges.

Euro gold prices rose faster still as the single currency sank towards four-week lows beneath $1.4350.

Compared with the pre-Euro price in German Deutsche Marks, gold has now held above its long-term peak of DM 40,000 per kilo since mid-Jan., averaging more than DM 43,500 this Sept.

"The recent appreciation of the Euro [vs. the Dollar] is beginning to bother policy makers in the Eurozone," reckons Tokyo economist Takeshi Makita at Sumitomo's Japan Research Institute.

"Deflationary pressure is strong."

"We're in pretty dire straits already right now," said Honda Motor's CEO Takanobu Ito in an interview at the HQ of Japan's second-largest automaker today.
"A Dollar-Yen [exchange rate] in the 80s would be too painful" for its exports, he told Reuters.

Today the Japanese Yen traded at ¥89.90 per Dollar, sparking a fresh 1.5% drop in Tokyo's Nikkei 225 share index.

Chinese markets were closed for the National Day holiday. Asian gold dealers expect only "limited business" on Friday as traders take a long weekend.

"The deterioration in the outlook for the US Dollar combined with an improvement in investor risk appetite is propelling gold prices higher," says HSBC's senior precious metals analyst James Steel.

"Gold appears poised to challenge its record highs."

"We still see a strict correlation between the [weak] Dollar and gold," said another trader this morning, noting that crude oil remains below its recent highs.

Crude oil and gold moved higher alongside the Euro, emerging markets and credit derivatives during the global "Reflation Rally" of 2003-2007.

World equities, however, are still one-third off their top of Nov. '07, while US oil futures have lost half their peak off summer '08. The Euro stands 10% below its record level vs. the Dollar.

Priced against a weighted basket of the world's top 10 currencies, gold bullion – as tracked by the Global Gold Index – has gained more than one-tenth in 2009 to date, closing Sept. some 6.5% below its record peak of Feb. this 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