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
Stock Markets Failing to Give Another AI Mega-trend Buying Opportunity - 6th Jun 20
Is the Stock Bulls' Cup Half-Full or Half-Empty? - 6th Jun 20
Is America Headed for a Post-Apocalyptic Currency Collapse? - 6th Jun 20
Potential Highs and Lows For Gold In 2020 - 5th Jun 20
Tying Gold Miners and USD Signals for What Comes Next - 5th Jun 20
Rigged Markets - Central Bank Hypnosis - 5th Jun 20
Gold’s role in the Greater Depression of 2020 - 5th Jun 20
UK Coronavirus Catastrophe Trend Analysis Video - 5th Jun 20
Why Land Rover Discovery Sport SAT NAV is Crap, Use Google Maps Instead - 5th Jun 20
Stock Market Election Year Cycles – What to Expect? - 4th Jun 20
Why Solar Stocks Are Rallying Against All Odds - 4th Jun 20
East Asia Will Be a Post-Pandemic Success - 4th Jun 20
Comparing Bitcoin to Other Market Sectors – Risk vs. Value - 4th Jun 20
Covid, Debt and Precious Metals - 3rd Jun 20
Gold-Silver Ratio And Correlation - 3rd Jun 20
The Corona Riots Begin, US Covid-19 Catastrophe Trend Analysis - 3rd Jun 20 -
Stock Market Short-term Top? - 3rd Jun 20
Deflation: Why the "Japanification" of the U.S. Looms Large - 3rd Jun 20
US Stock Market Sets Up Technical Patterns – Pay Attention - 3rd Jun 20
UK Corona Catastrophe Trend Analysis - 2nd Jun 20
US Real Estate Stats Show Big Wave Of Refinancing Is Coming - 2nd Jun 20
Let’s Make Sure This Crisis Doesn’t Go to Waste - 2nd Jun 20
Silver and Gold: Balancing More Than 100 Years Of Debt Abuse - 2nd Jun 20
The importance of effective website design in a business marketing strategy - 2nd Jun 20
AI Mega-trend Tech Stocks Buying Levels Q2 2020 - 1st Jun 20
M2 Velocity Collapses – Could A Bottom In Capital Velocity Be Setting Up? - 1st Jun 20
The Inflation–Deflation Conundrum - 1st Jun 20
AMD 3900XT, 3800XT, 3600XT Refresh Means Zen 3 4000 AMD CPU's Delayed for 5nm Until 2021? - 1st Jun 20
Why Multi-Asset Brokers Like TRADE.com are the Future of Trading - 1st Jun 20
Will Fed‘s Cap On Interest Rates Trigger Gold’s Rally? - 30th May
Is Stock Market Setting Up for a Blow-Off Top? - 29th May 20
Strong Signs In The Mobile Gaming Market - 29th May 20
Last Clap for NHS and Carers, Sheffield UK - 29th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Gold Relentless in its Surge Higher Above $1200

Commodities / Gold & Silver 2009 Dec 02, 2009 - 07:07 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE SPOT GOLD PRICE raced to new all-time highs overnight Wednesday, rising 1.3% from yesterday's peak to hit $1217 an ounce at the start of London trade.

The gold price in Euros broke above €800 an ounce for the first time ever, and broke new records against all other major world currencies bar the Aussie Dollar and Japanese Yen.


"Like a freight train in motion, gold cannot be stopped," says one Hong Kong dealer.

"Relentless," says a London analyst.

Silver, platinum and palladium followed gold higher in Asian dealing, recording new 2009 peaks before slipping back as gold dipped in London.

The US Dollar bounced, European stock markets ticked lower, and crude oil slipped back below $78 per barrel.

"We must watch out for bubbles forming on certain assets, and be careful in those areas," said a Chinese central bank policy-maker today when asked whether the People's Bank will increase its gold allocation.

"We must keep in mind the long-term effects when considering what to use as our reserves," vice-governor Hu Xiaolian told reporters after a senior colleague – State Council investment supervisor Ji Xiaonan – said he'd advised Beijing to buy 10,000 tonnes of gold by 2020.

"If China were to lift their gold reserves to 5,000 tonnes, which is equivalent to about two years of global [mining] production, that shift in demand would boost the gold price to around $2000 based on our models," writes David Rosenberg, formerly chief economist at Merrill Lynch, now at Gluskin Sheff.

A move to 10,000 tonnes – overtaking the United States' 75-year dominance of central-bank hoards – would take the price of gold above to $2600 on his calculations.

"Make no mistake, we are gold bulls," Rosenberg advised clients on Tuesday. "[But] we could get a meaningful gold correction at any time. The 200-day moving average is $970 an ounce, which means we could get as much as a 20% pullback and no fundamental trend-line would be violated.

"Anything that could spark a countertrend rally in the US Dollar – our principal near-term concern – would put gold at a much better price point for investors."

Wednesday's US opening brings last month's home-loans data, plus early guidance on Friday's much-awaited jobless numbers, courtesy of the private-sector ADP Payroll report.

Thursday will see Ben Bernanke seek confirmation of his second 5-year term as Federal Reserve chairman at a Senate hearing.

"In the recent crisis, actions by the Federal Reserve and the Treasury raised questions about central bank independence and proper accountability for use of taxpayer funds," says Richard Shelby, the most senior Republican senator on the committee.

Looking at Europe's state-aided banks, "We are sowing the seeds for the next crisis," says David Lascelles at London's Centre for the Study of Financial Innovation, "making banks much bigger."

Fifteen European banks now hold assets worth more than their domestic nation's economy, reports Bloomberg, up from 10 banks three years ago.

"It really goes against the currents of the time," says Lascelles.

Meantime at this morning's Gold Fix in London – used as a clearing and reference price by wholesale dealers – the Dollar-price of bullion hit its 21st record in 23 sessions.

The US Dollar bounced from near 2009 lows on the forex market, rising against the Euro and Japanese Yen as a tepid gain in Asian stock markets gave way to 0.5% losses across Europe.

Crude oil slipped back below $78 per barrel, while German Bunds and UK gilts both fell, driving 10-year yields up to 3.19% and 3.59% respectively.

Wholesale prices in the 350-million citizen Eurozone rose twice-as-fast last month as analysts expected, new data showed Wednesday morning.

The UK's PMI Construction Index picked up but signaled weakness for the 18th month running.

"The risk of deflation isn't averted yet," said Swiss National Bank president Jean-Pierre Roth to reporters earlier this week.

Confirming that the SNB has actively sold Francs against the Euro to depress their value, "We will stick to our strategy to act decidedly against an appreciation of the Swiss Franc," Roth said.

The Bank of Japan is "considering options" in its fight to depress the Yen from a 14-year high and reverse 8 months of consumer-price deflation, policy-maker Miyako Suda told the press on Wednesday.

Here in London, the Ernst & Young Item Club said the UK's fiscal deficit is likely to top government forecasts by more than 8% in 2009/10, swelling it towards one-sixth of total economic output at £190 billion ($315bn).

So far since March, quantitative easing by the Bank of England has bought £181bn of government bonds with newly created money.

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