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 Long-term Bull Market Means Buy the Dips

Commodities / Gold & Silver 2009 Dec 11, 2009 - 08:08 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD ticked higher in Asia and early London trade Friday, heading towards the weekend at $1140 an ounce – some 3.4% below the record weekly finish of a fortnight ago – as world stock markets crept towards new 14-month highs.

The "safe haven" Dollar and Yen both eased back on the currency markets, but the British Pound failed to benefit, taking the gold price in Sterling back up to £700 an ounce.


By lunchtime in Frankfurt, gold priced in Euros had recovered one-fifth of the last seven days' 6.5% loss from the intra-day peak above €812 an ounce.

Short-term, "Only a close back above former channel top at $1151 will remove the downside bias," says one bullion bank analysis today.

"After seeing large scale liquidation on consecutive Fridays we could still be in for some excitement today," says another.

But "the dip-buying we've been seeing will likely continue until the end of the year, reckons Steven Zhu at the Tonglian Futures Co. in Shanghai, speaking to Bloomberg.

"Investment demand for gold should recover after profit-taking and book-squaring dries up," agrees VTB Capital analyst Andrey Kryuchenkov, predicting a re-test of $1200 at the start of 2010.

Crude oil rallied today above $71 per barrel after Chinese trade data showed the fastest jump in energy imports since 2004, with refinery output rising by more than one-fifth.

China's export sales cut their year-on-year decline to 1.2%. Price inflation returned for the first time in nine month, adding 0.6%.

Government bonds meantime extended Thursday's sharp drop, with the yield offered by 10-year US Treasuries rising to a one-month high as prices slipped.

Ukraine's government appealed to the International Monetary Fund for $2 billion in emergency funds amid "an extremely difficult situation" with its finances.

"I don't think [gold] is really in a bubble right now," says Michael Widmer, metals strategist for Bank of America-Merrill Lynch.

"If you look at what drove some of the buying, we do still see a lot of reserve diversification from central banks [which] by definition means they're not necessarily buying into gold markets because they expect huge price rises.

"They buy gold because it's good diversification."

"When you say it's a bubble...nobody owns gold yet," said commodities' fund manager Jim Rogers to CNBC Maria Bartiromo late Thursday, citing a straw poll of 300 money managers at a recent speech he made in Prague.

Some 76% said they had never owned gold, Rogers said.

Currently backing a short-term bounce in the US Dollar – simply because "Everyone is so pessimistic, including me!" – Rogers said that "Paper money throughout the world is being printed right now...

"We may have to wind up with all of our money in commodities because there's no paper money that we can trust."

Today the FistfulOfEuros blog notes that the 2009 government deficits of both Spain and Greece – put on "negative watch" and downgraded respectively by the ratings agencies this week – have been funded with European Central Bank cash initially lent to their commercial banks amid last year's financial crisis.

"The UK and the US are classified as 'resilient' rather than 'resistant'," said the Moody's rating agency in a statement, commenting on the threat to triple-A status. Moody's classes resilience below resistance, noting today that "the rise in [UK and US] debt and higher interest costs could test the ratings...but not right away."

London's Institute for Fiscal Studies (IFS) said on Thursday that UK state debt will persist at 80% of annual GDP for "at least" the next 30 years if pension obligations aren't reduced or funded.

The unfunded liability for UK public-sector and statutory pensions now totals more than £2.2 trillion ($3.5bn) according to data from the Office for National Statistics and Government Actuary Department – more than twice the outstanding government debt.

Forecasting gold will reach "a couple of thousand dollars an ounce" within the next decade, "That's not a very radical assumption," Jim Rogers told CNBC yesterday. "It's only five or six per cent a year from here."

Gold prices have averaged 16% annual gains vs. the Dollar since 2000.

"The idea that paper currency is a poor store of value is just beginning to build up a head of steam among top investment thinkers and has not filtered down into public behavior," writes John Hathaway of Tocqueville Asset Management, the $7.6 billion New York fund.

"Warnings of a bubble in gold are coming from the same quarters that failed to spot the...financial excesses of internet [stocks], housing, leverage [and] hedge funds. We welcome the skepticism."

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