Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Stock Market Trend Forecast 2020 - Trend Analysis - Video - 19th Jan 20
Stock Trade-of-the-Week: Dorchester Minerals (DMLP) - 19th Jan 20
INTEL (INTC) Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 18th Jan 20
Gold Stocks Wavering - 18th Jan 20
Best Amazon iPhone Case Fits 6s, 7, 8 by Toovren Review - 18th Jan 20
1. GOOGLE (Alphabet) - Primary AI Tech Stock For Investing 2020 - 17th Jan 20
ERY Energy Bear Continues Basing Setup – Breakout Expected Near January 24th - 17th Jan 20
What Expiring Stock and Commodity Market Bubbles Look Like - 17th Jan 20
Platinum Breaks $1000 On Big Rally - What's Next Forecast - 17th Jan 20
Precious Metals Set to Keep Powering Ahead - 17th Jan 20
Stock Market and the US Presidential Election Cycle  - 16th Jan 20
Shifting Undercurrents In The US Stock Market - 16th Jan 20
America 2020 – YEAR OF LIVING DANGEROUSLY (PART TWO) - 16th Jan 20
Yes, China Is a Currency Manipulator – And the U.S. Banking System Is a Metals Manipulator - 16th Jan 20
MICROSOFT Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 15th Jan 20
Silver Traders Big Trend Analysis – Part II - 15th Jan 20
Silver Short-Term Pullback Before Acceleration Higher - 15th Jan 20
Gold Overall Outlook Is 'Strongly Bullish' - 15th Jan 20
AMD is Killing Intel - Best CPU's For 2020! Ryzen 3900x, 3950x, 3960x Budget, to High End Systems - 15th Jan 20
The Importance Of Keeping Invoices Up To Date - 15th Jan 20
Stock Market Elliott Wave Analysis 2020 - 14th Jan 20
Walmart Has Made a Genius Move to Beat Amazon - 14th Jan 20
Deep State 2020 – A Year Of Living Dangerously! - 14th Jan 20
The End of College Is Near - 14th Jan 20
AI Stocks Investing 2020 to Profit from the Machine Intelligence Mega-trend - Video - 14th Jan 20
Stock Market Final Thrust - 14th Jan 20
British Pound GBP Trend Forecast Review - 13th Jan 20
Trumpism Stock Market and the crisis in American social equality - 13th Jan 20
Silver Investors Big Trend Analysis for – Part I - 13th Jan 20
Craig Hemke Gold & Silver 2020 Prediction, Slams Biased Gold Naysayers - 13th Jan 20
AMAZON Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 11th Jan 20
Gold Price Reacting to Global Flash Points - 11th Jan 20
Land Rover Discovery Sport 2020 - What You Need to Know Before Buying - 11th Jan 20
Gold Buying Precarious - 11th Jan 20
The Crazy Stock Market Train to Bull Eternity - 11th Jan 20
Gold Gann Angle Update - 10th Jan 20
Gold In Rally Mode Suggests Commitment of Traders (COT) Data - 10th Jan 20
Disney Could Mount Its Biggest Rally in 2020 - 10th Jan 20
How on Earth Can Gold Decline During the U.S. – Iran Crisis? - 10th Jan 20
Getting Your HR Budget in Line - 10th Jan 20
The Fed Protects Gamblers at the Expense of the Economy - 9th Jan 20
Last Chance to Get Microsoft Windows 10 for FREE! - 9th Jan 20
The Stock Market is the Opiate of the Masses - 9th Jan 20
Is The Energy Sector Setting Up Another Great Entry? - 9th Jan 20
The Fed Is Creating a Monster Bubble - 9th Jan 20
If History Repeats, Video Game Stocks Could Soar 600%+ - 9th Jan 20
What to Know Before Buying a Land Rover Discovery Sport in 2020 - 8th Jan 20
Stock Market Forecast 2020 Trend Analysis - 8th Jan 20
Gold Price at Resistance - 8th Jan 20
The Fed Has Quietly Started QE4 - 8th Jan 20
NASDAQ Set to Fall 1000pts Early 2020, and What it Means for Gold Price - 8th Jan 20
Gold 2020 - Financial Analysts and Major Financial Institutions Outlook - 8th Jan 20
Stock Market Trend Review - 8th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold Jumps on Record Chinese Export Data, Silver Hits 30-Year High vs. Sterling

Commodities / Gold and Silver 2010 Jan 11, 2010 - 07:52 AM GMT

By: Adrian_Ash


Best Financial Markets Analysis ArticleTHE PRICE OF GOLD and silver both leapt alongside oil prices, base metals and agricultural commodities at the start of Monday's trading, touching a 5-week high against the US Dollar at $1160 an ounce.

Government bonds also pushed higher, sending interest rates lower from last week's multi-month highs.

World stock markets rose 0.5% on the MSCI index.

The US Dollar index – measuring its exchange rate against a basket of other major currencies – fell to its lowest level since Dec. 12th.

"Gold gapped $20 higher at the open in Asia on news of record import figures from China and a weaker US Dollar," notes one London dealer.

Beijing today reported 18% growth in Chinese exports and 56% growth in total imports for last month.

Consensus forecasts had been for 4% and 31% growth respectively. Crude oil deliveries to China – now the world's largest private gold consumer, as well as the No.1 gold mining producer – broke 5 million barrels per day for the first time.

Friday's US pay-roll data, in contrast, was headlined by 85,000 job losses for Dec. But the Labor Dept.'s survey of households in fact pointed to "an enormous" rise in unemployment of 589,000 notes hedge-fund manager and investment author John Mauldin of Millennium Wave.

"Those classified as not in the work force, due to the fact that they did not look for jobs, rose by 843,000."

The US Dollar sank at the start of Asian trade on Monday, losing over 1¢ per Euro and dropping towards four-week lows that unwound more than a quarter of Dec.'s sharp rally.

The price of gold rose faster than the Dollar fell, however, briefly jumping above €800 an ounce for French, German and Italian citizens – a level breached only two days running early last month.

British investors now ready to buy gold saw the price hit £720 an ounce today, barely 2% below the all-time high of early Dec.

US investors saw the London Gold Fix hit a five-week high, some 5% below its all-time peak of Dec. 3rd.

"Gold prices had become overbought [by early Dec.] and that condition has now been corrected," says the latest Precious Metals Monthly from Canada's Scotia Mocatta bullion bank.

"The longer term picture remains bullish and there is still considerable risk and uncertainty as to how the economic malaise will be sorted out.

"In addition, geopolitical issues have resurfaced," says the market maker, citing the attempted Christmas Day airliner bombing, the rising oil price, and political unrest as well as further nuclear tests in Iran.

Latest data from US regulator the Commodity Futures Trading Commission (CFTC) showed late Friday that total open interest in New York gold futures and options rose 3.2% last week to a three-week high, but remained more than a tenth below the record peak of late Nov.

Market positioning in the CFTC's Commitment of Traders report showed little change however for either commercial (industry) players, large speculators (hedge funds etc.) and non-reportable positions (i.e. smaller institutions and private investors).

Commercial players acting for gold miners, refiners and bullion wholesalers continued to hold 3 bearish bets for every 1 bullish contract.

The "net long" position held by speculative, non-commercial traders rose by the equivalent of 8 tonnes to 921 tonnes, still more than 10% below the record of late Oct.

New York's SPDR Gold Trust – the world's largest exchange-traded gold fund – reduced the volume of gold bullion needed to back its stock-market shares by almost 1% to three-week low of 1119.5 tonnes.

"We are expecting further strength in Gold prices, driven not just by Dollar weakness but also by fear of inflation and fiscal dislocations, plus continuing asset diversification moves by central banks," says David Wilson of Société Générale – the highest price-forecaster for 2010 at $1388 in this year's survey by the London Bullion Market Association (LBMA).

The average forecast in 2009 was more than 10% below last year's out-turn at $880. Amongst the 28 bank analysts, traders and dealers surveyed last week, the consensus 2010 forecast puts this year's average gold price just shy of $1200.

"[For silver,] better economic data bodes well for industrial demand," says Scotia Mocatta today, "but overall the market will remain dependent on investors' interest."

Silver prices jumped 2.2% vs. the Dollar early Monday, and touched new 18-month highs vs. the Euro.

Priced in British Pounds Sterling, silver hit a near-30 year high above £11.64 an ounce.

The correlation of silver prices with industrial metals led by copper rose throughout the second-half of 2009.

Analysis prepared by the GFMS consultancy for Washington's non-profit Silver Institute in November said that a sharp drop in industrial and photographic use during 2009 would likely be offset by a near-tripling in coin production and investment-bar hoarding.

Adrian Ash

By Adrian Ash

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 , 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.

© 2005-2019 - 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