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
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Daily London Gold Market Report - Gold Targets Next Resistance at $693

Commodities / Gold & Silver Jul 23, 2007 - 10:35 AM GMT

By: Adrian_Ash


THE PRICE OF GOLD traded in a tight range early Monday, briefly nearing Friday's two-month high of $685 per ounce before recording the highest Gold Fix in London since May 9th at $683.50.

"Gold seems to be supported at the moment by both the weak Dollar and strong crude," said a Bank of China gold trader to Bloomberg this morning.

The Dollar's decline continued in the currency market, where Sterling touched a new quarter-century high versus the US currency above $2.0600. That capped the price of gold for British investors below £332.50 per ounce at the London opening.

The Euro, meantime, pulled back from Friday's fresh all-time high against the Dollar above $1.3840. That helped the Euro Price of Gold touch a new seven-week high of €495 per ounce.

"Gold is still not getting the headline space it will in the next year," says John Dizard in today's Financial Times , "but it has broken out of the desultory downtrend that began in April.

Why? "The perception of underlying systemic risk is not going away," says Dizard, noting the ongoing collapse in complex credit derivatives based on subprime home loans...This trend also seems to be supported, so far, by the European national central banks, who aren't selling as much gold as they were."

Overnight in Tokyo , the Nikkei equity index sank more than 1% to a one-month low. Gold futures traded at the Tocom for delivery in June '08 ended little changed at the equivalent of $689.80 per ounce.

Last week saw the price of gold rise 2.3% for US Dollar investors, while the broad S&P equity index lost 1.1% of its value. Gold also gained nearly 2.1% against the Euro, while the EuroFirst 300 stock market index lost 1.7% for the week. British investors saw gold rise 1.4% against the Pound Sterling, while the UK 's leading 100 shares dropped 2% of their value on average over the week.

Does this mark a sudden departure from gold's close correlation with world equity markets? "Of late," notes Wolfgang Wrzesniok-Rossbach in the latest metals report from Heraeus, the German refining giant, "when the financial markets came under pressure, gold also found itself losing ground."

Indeed, since 2003 the Gold Market has risen – and fallen – in lock-step with the world's major stock markets. "But this time around it seemed to react inversely," says Wrzesniok-Rossbach. "Even then, to make a qualified assertion that gold has re-discovered it's traditional role as a 'safe haven' is perhaps a little too early."

In the broader markets, both Japanese and US government bonds rose to six-week highs overnight, pushing interest rates lower again after last week's 15-point drop in the yield on ten-year US Treasuries. Gasoline futures, meantime, continued to drop after US refineries announced they're now running at the fastest pace in seven weeks.

Crude oil for September delivery fell 0.5% after the Opec cartel of oil-producing nations said it may increase output to ease energy-cost pressures on the global economy. Corn and soybean futures fell while wheat futures rose, and rubber prices slipped back for the first time in four sessions after Beijing reported that China 's natural rubber imports fell 0.2% in the six months to June.

"In the medium-term gold does look a little overbought," says today's technical commentary from Standard Bank in Johannesburg . "But last week's rally looks as if the bulls may test the next level of technical resistance at 693.40.

"Should this level break then it would seem that gold may be beginning to attempt a retest of the psychological 700 level in the short-term and maybe even the 26-year high of 730, set in May 2006, in the long-term."

By Adrian Ash

Gold price chart, no delay | Gold prices live | Latest gold market news
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 2007

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 - 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