Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
How to Protect Your Site from Bots & Spam? - 20th Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 20th Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 20th Aug 19
The Gold Rush of 2019 - 20th Aug 19
How to Play Interest Rates in US Real Estate - 20th Aug 19
Stocks Likely to Breakout Instead of Gold - 20th Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 20th Aug 19
Holiday Nightmares - Your Caravan is Missing! - 20th Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

Gold Bounces on Strong U.S. GDP Economic Stimulus Result

Commodities / Gold & Silver 2009 Oct 29, 2009 - 08:39 AM GMT

By: Adrian_Ash


Best Financial Markets Analysis ArticleTHE PRICE OF GOLD rose $10 from last night's 3-week low of $1027 on Thursday morning in London, gaining as Asian stock markets closed the day 1.5% lower and the United States reported an end to its economic recession.

GDP growth during June-to-Sept. was estimated at 3.5%, much-stronger than analysts forecast, as domestic prices also rose sharply – up 1.6% from a year earlier.

Ahead of today's $31 billion auction of new 7-year debt, the yield on mid-dated US Treasury bonds ticked up to 3.05%.

Seven-year yields have averaged 2.77% in 2009-to-date.

"[Gold] found some physical buying in Asia overnight," says one dealer.

"Major price support is seen at $1021 from the early highs of gold in September," says Scotia Mocatta in its daily note.

Over on the currency markets on Thursday, the Dollar fell hard on the Census Bureau's GDP report, capping the rebound in Gold for non-Dollar investors.

Sterling gold prices rose to £630 an ounce from Wednesday's one-month low at £626.

The gold price in Euros crept back above €701 an ounce.

'The Euro is not particularly strong relative to the Yen, the Swiss Franc, the Canadian or Australian Dollars or several other currencies," noted European Central Bank policy-maker Christian Noyer yesterday.

"The question of the relationship with the Dollar is not specific to the Eurozone."

After the US Dollar rose for 3 sessions running late Wednesday, "Ongoing profit taking may continue to weigh on the bullion market, should the Dollar remain firm," said HSBC analyst James Steel in a note.

"The risk of adding longs under current financial conditions, at current prices, surely outweighs the benefit," concurred Walter de Wet at Standard Bank.

"We foresee more risk aversion towards the end of the week."

Holdings in the SPDR Gold Trust – the world's largest gold ETF – shrank by one tonne for the third day running on Wednesday, dropping to 1104 tonnes.

Open interest in US gold futures also fell to a 3-week low, dropping below half-a-million contracts.
"Gold is not an inflation hedge. It is a crisis hedge," says Graham Bentley, head of investment marketing at the £35 billion Skandia UK, "and crises do not necessarily involve inflation.

"Despite last year's market mischief, we are not in the same league as the 1970s' hyper-inflation and global recession. On the contrary, evidence that the current recession is over is visible across the globe, if less so in the UK."

New data from the Bank of England here in London today showed lending to non-financial companies shrinking by 3.4% from a year earlier in Sept. Lending to UK households rose by 2.0% annually, the slowest pace on record and down from a 10-year average of 10.5%.

Consumer confidence in the 16-nation Eurozone came in below expectations. New US jobless claims for last week were also worse than analysts forecast.

A jump in US imports – rising in price by 10% annualized – was the main drag on America's third-quarter GDP growth.

Consumer spending led the 3.5% headline, driven by big-ticket shopping on white goods and cars, with the "cash for clunkers" program funding $4,500 rebates on auto purchases.

New spending on housing projects rose 23% annualized. The $8,000 tax credit currently given to first-time buyers – and due to expire on Nov. 30 – is currently being debated in Congress.

European stock markets reversed early losses on the news, and US stock futures turned upwards.

Australia's No.1 gold mining firm Newcrest today said it's looking for acquisition targets and forecast rising prices ahead, but said its strong local currency is hampering domestic profits by raising costs.

Gold Fields Ltd – Africa's No.2 producer – warned that proposed energy-price hikes by South Africa's state-owned Eskom will sharply increase its production costs.

"It's too early to give the full impact on the business, and we are evaluating it," CEO Nick Holland told reporters, forecasting a 17% increase in costs before accounting for "knock-on" effects.

Gold and platinum production in South Africa – the world's No.3 and No.1 respectively – was briefly brought to a halt in early 2008 by country-wide power cuts, caused by a lack of infrastructure investment and maintenance.

By Adrian Ash

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 , 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 - 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