Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Stock Market Dow Long-term Trend Analysis - 16th Oct 19
This Is Not a Money Printing Press - 16th Oct 19
Online Casino Operator LeoVegas is Optimistic about the Future - 16th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - Video - 16th Oct 19
$100 Silver Has Come And Gone - 16th Oct 19
Stock Market Roll Over Risk to New highs in S&P 500 - 16th Oct 19
10 Best Trading Schools and Courses for Students - 16th Oct 19
Dow Stock Market Short-term Trend Analysis - 15th Oct 19
The Many Aligning Signals in Gold - 15th Oct 19
Market Action Suggests Downside in Precious Metals - 15th Oct 19
US Major Stock Market Indexes Retest Critical Price Channel Resistance - 15th Oct 19
“Baghad Jerome” Powell Denies the Fed Is Using Financial Crisis Tools - 15th Oct 19
British Pound GBP Trend Analysis - 14th Oct 19
A Guide to Financing Your Next Car - 14th Oct 19
America's Ruling Class - Underestimating Them & Overestimating Us - 14th Oct 19
Stock Market Range Bound - 14th Oct 19
Gold, Silver Bonds - Inflation in the Offing? - 14th Oct 19
East-West Trade War: Never Take a Knife to a Gunfight - 14th Oct 19
Consider Precious Metals for Insurance First, Profit Second... - 14th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - 13th Oct 19
The Most Successful IPOs Have This One Thing in Common - 13th Oct 19
Precious Metals & Stock Market VIX Are Set To Launch Dramatically Higher - 13th Oct 19
Discovery Sport EGR Valve Gasket Problems - Land Rover Dealer Fix - 13th Oct 19
Stock Market US Presidential Cycle - Video - 12th Oct 19
Social Security Is Screwing Millennials - 12th Oct 19
Gold Gifts Traders With Another Rotation Below $1500 - 12th Oct 19
US Dollar Index Trend Analysis - 11th Oct 19
China Golden Week Sales Exceed Expectations - 11th Oct 19
Stock Market Short-term Consolidation Does Not change Secular Bullish Trend - 11th Oct 19
The Allure of Upswings in Silver Mining Stocks - 11th Oct 19
US Housing Market 2018-2019 and 2006-2007: Similarities & Differences - 11th Oct 19
Now Is the Time to Load Up on 5G Stocks - 11th Oct 19
Why the Law Can’t Protect Your Money - 11th Oct 19
Will Miami be the First U.S. Real Estate Bubble to Burst? - 11th Oct 19
How Online Casinos Maximise Profits - 11th Oct 19
3 Tips for Picking Junior Gold Stocks - 10th Oct 19
How Does Inflation Affect Exchange Rates? - 10th Oct 19
This Is the Best Time to Load Up on These 3 Value Stocks - 10th Oct 19
What Makes this Gold Market Rally Different From All Others - 10th Oct 19
Stock Market US Presidential Cycle - 9th Oct 19
The IPO Market Is Nowhere Near a Bubble - 9th Oct 19
US Stock Markets Trade Sideways – Waiting on News/Guidance  - 9th Oct 19
Amazon Selling Fake Hard Drives - 4tb WD Blue - How to Check Your Drive is Genuine  - 9th Oct 19
Whatever Happened to Philippines Debt Slavery?  - 9th Oct 19
Gold in the Negative Real Interest Rates Environment - 9th Oct 19
The Later United States Empire - 9th Oct 19
Gold It’s All About Real Interest Rates Not the US Dollar - 8th Oct 19
A Trump Impeachment Would Cause The Stock Market To Rally - 8th Oct 19
The Benefits of Applying for Online Loans - 8th Oct 19
Is There Life Left In Cannabis - 8th Oct 19
Yield Curve Inversion Current State - 7th Oct 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast Oct - Dec 2019 by Nadeem Walayat

Gold Hits Fresh Record Higher in USD, Euro and GBP

Commodities / Gold & Silver 2009 Nov 24, 2009 - 07:56 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF WHOLESALE gold in the professional market hit a new record London Fix of $1170.25 an ounce early Tuesday, while Asian stock markets closed the day lower and the US Dollar slipped on the forex market.

Crude oil also fell back. Government bonds ticked higher. One London gold dealer noted a "sense of disappointment" that gold failed to reach $1200 an ounce last night as the December option contract expired.


"Such is the nature of the market these days..."

British investors now ready to buy gold saw the price hit a fresh all-time record for the third day running on Tuesday, touching £708.81 at the AM Gold Fix here in London.

Against the Euro, gold also recorded a new record Fix – used as a clearing and benchmark reference price by large dealers and owners – at €782.93 an ounce.

"Any retracement that found support near last week's highs in the 1151-1152 range would keep the bulls on the charge," says Scotia Mocatta's latest technical note.

"In the wake of the [recent] announcements from central banks – India, Russia, and Mauritius – the market is catching onto a strong buy signal as investors hold a vote of no-confidence in the US Dollar," says a note from MKS Finance in Geneva.

"With very little scrap coming in, it seems most investors have positioned themselves long."

Russia's central bank said today that it grew its gold reserves by 2.6% to 606.5 tonnes last month, maintaining its position as the world's ninth largest holder.

"There is a clear correlation between Dollar weakness and a rise in speculative length" in the broad commodities markets, notes Walter de Wet at Standard Bank, "especially since 2007.

Latest data from the US Comex gold futures and options market show the outstanding number of contracts surging to new all-time records last week. The "net long" position held by speculative players as a group remained below the peak levels of mid-October.

"Commodities will remain partly a Dollar play," says de Wet, but "More speculative activity means greater volatility.

"We would buy on large dips."

Speaking in Madrid on Monday, "I consider extremely important that the US authorities" support a Strong Dollar policy," said European Central Bank president Jean-Claude Trichet.

The European single currency has risen 30% against the Dollar since Trichet became ECB president in mid-2003, but also gained 28% against the British Pound.

The Euro has slipped 5% against the Chinese Yuan over that period.

Trichet also noted yesterday that Europe's own record-low interest rate of 1.0% has "benefited" the large share of Spanish mortgage debtors on adjustable-rate deals.

Here in London, "Bank Rate is almost at zero, and the [Monetary Policy Committee] has extended its program of asset purchases – now to £200 billion," said Bank of England governor Mervyn King to a parliamentary meeting on Tuesday morning, warning of the "significant margin of spare capacity in the economy...

"It is to counteract those forces that the [Bank of England] has taken unprecedented monetary policy actions over the past year...[to] help restore the level of spending...and ensure inflation is on track."

Currently paying benefits to almost 7,500 former staff while planning retirement provision for current Bank members, the Bank of England's own pension fund switched virtually all its money into inflation-linked government bonds between Feb. 2008 and Feb. 2009 according to the latest Update, published under Freedom of Information rules.

The Bank's key interest rate was slashed from 5.25% to 0.50% during that time. Inflation ran at 3.5% on the Retail Price measure (ex-mortgages and indirect taxes).

Rising from 70.7% to more than 88% of the Bank fund's total allocation, inflation-linked bonds returned a net loss of 6% over the period. Of the fund's other assets, more than nine-tenths were in conventional UK government bonds, which returned 3.1% between Feb. 2008 and '09.

The Bank of England's pension fund effectively quit the stock market in the year-to-Feb. 2008.

Meantime in New York, and confirming what David Morgan of Silver-Investor said his subscribers were reporting in September, HSBC Bank is ejecting private-investor gold from its vaults says today's Wall Street Journal.

Freeing up space for institutional funds, HSBC Bank began telling smaller clients this July that their metal "will be returned to the address of record...at your expense" unless instructed otherwise.

HSBC Bank apparently recommends ejected clients use Brinks, the publicly-traded US-based secure storage provider. Brinks did not reply to WSJ enquiries about the matter.

"I can jump up and down and scream all day long about how much I don't like it. But it's their business decision," the paper quotes David Norris, executive vice-president of Texas-based GoldStar Trust Co., which says it's been using HSBC Bank's facilities for 15 years on behalf of retirement-account clients.

"I have never seen any relocation like this," says a managing director of the Delaware Depository Service Co.

"Many facilities are overloaded," says a manager at vaults in Nampa, Idaho, also reporting 500% growth in metal storage since August thanks to the HSBC decision.

Meantime on the supply side, John Holliday, head of Newcrest Mining's global projects team, told delegates at the last day of the New Generation Gold Conference in Perth that Australia – possibly the gold mining world's most heavily explored continent – faces the same falling ore grades and lower output afflicting other heavily-developed regions.

"More investment in greenfields [mine] exploration and new technologies may help delay the trend, but only by possibly bringing forward the discovery of the fewer, very hidden deposits remaining," said Holliday of Australia's gold output.

The London Times today picks up last week's report in the South African Journal of Science that local gold-mining reserves may be 90% lower than thought.

Formerly No.1, "Within three years, South Africa could fall to fifth place" in the world table of producing nations the paper quotes GFMS analyst Will Tankard.

By Adrian Ash
BullionVault.com

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
Formerly 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