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 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 Rally Triggers Buy Stops as Crude Oil Leads Commodities Surge

Commodities / Gold and Silver 2010 Jan 05, 2010 - 08:09 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD eased back from its strongest Dollar and Euro prices in nearly three weeks in London on Tuesday, holding above a one-month high of £700 per ounce for UK investors as European shares and US stock futures held flat.

The CRB commodities index rose almost 2% as sugar neared a three-decade high and US crude oil contracts touched $82 per barrel – more than twice the price of 12 months ago.


Consumer price inflation in the 16-nation Eurozone leapt in Dec. to a 10-month high, the Eurostat agency said Tuesday morning, unwinding the last of 2009's second-half deflation.

"Buy stops were triggered" as gold rose late in Asia says a Hong Kong dealer today, with professional traders re-entering the gold market after last month's 12% drop.

"The Dollar remains the key driver," says an analyst's note. "All commodities have benefited from an increase in risk appetite."

But "Buying interest in the physical market seems to have faded on gold's [1.8%] rally yesterday," says Standard Bank's daily commodity briefing.

"We need to see much more Dollar weakness on a trade-weighted basis to sustain a rally in gold." (Is gold's 10-year run all about the Dollar? Read Dollar Nonsense here...)

Monday saw the 1128-tonne SPDR Gold trust shed five tonnes of the gold backing its exchange-traded shares, the first such drop in almost a month but only equal to the annual 0.4% expense ratio it charges stock-holders.

Long-dated government bonds fell Tuesday morning, pushing 30-year US Treasury yields up to 4.75% ahead of Pending US Home Sales data and Vehicle Sales figures for Dec.

Latest data from US regulator the Commodity Futures Trading Commission showed speculative, non-industry gold traders cutting their "net long" position in Comex derivatives in the last week of 2009, down 2.5% to the equivalent to 913 tonnes.

The "net short" belonging to commercial traders hedging their inventories also fell to a three-month low, but in aggregate, these miners, refiners and wholesalers continued to hold 3 bearish contracts for every 1 bullish bet.

The commercial traders' "bull ratio" peaked at 42% of their directional bets as Dollar gold prices slumped in the fall of 2008.

"The fact that speculative long positions have recently been at all-time highs is a further illustration of the interest in the [precious metals] market," writes Rhona O'Connell of the GFMS consultancy at MineWeb.com.

Reviewing 2009, O'Connell says cumulative investment flows into the world's major gold ETF trust funds – led by the SPDR – "netted out" at $16.9 billion last year.

Bond funds meantime saw global inflows of $158bn according to analysts EPFR. Emerging-market equity funds received $64.5bn.

Latest data from the London Bullion Market Association (LBMA) meantime show daily turnover in the professional wholesale market hitting a 6-month high in November, with the value of wholesale dealing (both in physical and also in "unallocated" credit accounts) rising to its strongest level since Jan. 2008.

According to international money market (IMM) data, speculative traders continued to hold a "long Dollar" position in their forex accounts last week, reversing the strongly bearish position taken through to early December.

The International Monetary Fund's new 2010 Outlook meanwhile forecast strong gains in commodity prices – already up 24% in 2009 – as "industrialization continues in emerging and developing economies.

"Accommodating this demand will eventually require further capacity expansion in many commodity sectors, with some need to tap higher-cost sources," says IMF researcher Thomas Helbling.

"Demand is expected to continue rising at a solid pace."

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 2010

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