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
Friday Stock Market CRASH Following Israel Attack on Iranian Nuclear Facilities - 19th Apr 24
All Measures to Combat Global Warming Are Smoke and Mirrors! - 18th Apr 24
Cisco Then vs. Nvidia Now - 18th Apr 24
Is the Biden Administration Trying To Destroy the Dollar? - 18th Apr 24
S&P Stock Market Trend Forecast to Dec 2024 - 16th Apr 24
No Deposit Bonuses: Boost Your Finances - 16th Apr 24
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 Short-term Weakness

Commodities / Gold & Silver Jul 26, 2007 - 10:15 AM GMT

By: Adrian_Ash


SPOT GOLD PRICES held flat from last night's US close by lunchtime in London on Thursday, pulling back $2 from an overnight spike to trade at $675.50 per ounce.

The metal had earlier closed Hong Kong unchanged at the same level. Gold dealers in the crucial Indian market – where jewelry and investment-bar demand accounted for one ounce of gold in every five sold worldwide last year – reported slower sales after gold's recent rally to 11-week highs against the Dollar.

"There might also be a 10-15 days delay in the start of the busy season this year as the [Hindu] festivals are delayed," said Mayank Khemka of Khemka International to Reuters India. "But that doesn't reduce the overall demand."

Tokyo gold futures for June '08 delivery lost 0.4% against the Yen today, bringing the losses since Monday to 1.6% after last week's 2.0% gains. The most actively traded Tocom gold futures contract ending the session equal to $684.50 per ounce.

"Gold's demise yesterday was not solely linked to the Euro," says today's technical note from Standard Bank in Johannesburg , commenting on Wednesday's near $10 loss. "It was perhaps also a liquidity play in the market.

"Investors' confidence has obviously been affected by the subprime mortgage credit crunch gathering pace, and this in turn had led global stocks being sold off on Tuesday night. Gold saw good profit-taking yesterday, potentially from funds looking to raise cash and pull in capital invested into risky assets such as commodities and global stock markets before the true effect on the US housing downturn has been assessed."

On a technical level, "this retracement in gold is giving us a signal that gold could be heading towards $671 level on the downside in the interim and potentially target $669 or lower before attempting to make a drive higher again."

Yesterday's 1.5¢ drop in the Euro/Dollar exchange rate was followed by flat trade early Thursday, with the European single currency holding around $1.3710. The British Pound, meantime, continued to pull lower, firmly inside the downtrend begun Monday and reaching a low of $2.0430 as the New York open drew near.

That decline in the Pound kept the Sterling price of gold for British buyers at £330. Eurozone gold investors saw the price trade in a tight range around €493 per ounce.

"If the Dollar's value should continue to rise rapidly it could trigger gold selling by funds," reckons Koji Suzuki, a market analyst at Kazaka Commodity in Tokyo . "The rise [last week] was driven by a weaker Dollar, and now that the US currency is recovering, the Tokyo gold market can't find the incentive to rise for the time being."

Meantime in the stock market, the Tokyo Nikkei index lost 0.9% on Thursday to close at a two-month low. The FTSE in London fell 0.5% after nearing a 3-month low. Nasdaq futures pointed to a higher start in New York after strong earnings results from Apple and Qualcomm.

Zinc, copper and nickel prices rose at the London Metals Exchange. Crude oil prices also rose, adding to Wednesday's gains on the back of poor US inventory data and taking one barrel of WTI Nymex for Aug. delivery to $76.71.

"There needs to be a perception of gold as being a preferred alternative asset," says Bill O'Neill of Logic Advisors in California . "It's not going to go higher just because the Euro rallied against the Dollar.

"The importance of the alternative-asset and flight-to-safety demand was very much shown [recently] by the fact that we had oil pushing well over $70 and the Dollar plunging, and yet gold wasn't catching up."

By Adrian Ash

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
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