Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Copper/Gold Ratio Would Change the Macro - 21st Oct 20
Are We Entering Stagflation That Will Boost Gold Price - 21st Oct 20
Crude Oil Price Stalls In Resistance Zone - 21st Oct 20
High-Profile Billionaire Gives Urgent Message to Stock Investors - 21st Oct 20
What's it Like to be a Budgie - Unique in a Cage 4K VR 360 - 21st Oct 20
Auto Trading: A Beginner Guide to Automation in Forex - 21st Oct 20
Gold Price Trend Forecast into 2021, Is Intel Dying?, Can Trump Win 2020? - 20th Oct 20
Gold Asks Where Is The Inflation - 20th Oct 20
Last Chance for this FREE Online Trading Course Worth $129 value - 20th Oct 20
More Short-term Stock Market Weakness Ahead - 20th Oct 20
Dell S3220DGF 32 Inch Curved Gaming Monitor Unboxing and Stand Assembly and Range of Movement - 20th Oct 20
Best Retail POS Software In Australia - 20th Oct 20
From Recession to an Ever-Deeper One - 19th Oct 20
Wales Closes Border With England, Stranded Motorists on Severn Bridge? Covid-19 Police Road Blocks - 19th Oct 20
Commodity Bull Market Cycle Starts with Euro and Dollar Trend Changes - 19th Oct 20
Stock Market Melt-Up Triggered a Short Squeeze In The NASDAQ and a Utilities Breakout - 19th Oct 20
Silver is Like Gold on Steroids - 19th Oct 20
Countdown to Election Mediocrity: Why Gold and Silver Can Protect Your Wealth - 19th Oct 20
“Hypergrowth” Is Spilling Into the Stock Market Like Never Before - 19th Oct 20
Is Oculus Quest 2 Good Upgrade for Samsung Gear VR Users? - 19th Oct 20
Low US Dollar Risky for Gold - 17th Oct 20
US 2020 Election: Are American's ready for Trump 2nd Term Twilight Zone Presidency? - 17th Oct 20
Custom Ryzen 5950x, 5900x, 5800x , RTX 3080, 3070 64gb DDR4 Gaming PC System Build Specs - 17th Oct 20
Gold Jumps above $1,900 Again - 16th Oct 20
US Economic Recovery Is in Need of Some Rescue - 16th Oct 20
Why You Should Focus on Growth Stocks Today - 16th Oct 20
Why Now is BEST Time to Upgrade Your PC System for Years - Ryzen 5000 CPUs, Nvidia RTX 3000 GPU's - 16th Oct 20
Beware of Trump’s October (November?) Election Surprise - 15th Oct 20
Stock Market SPY Retesting Critical Resistance From Fibonacci Price Amplitude Arc - 15th Oct 20
Fed Chairman Begs Congress to Stimulate Beleaguered US Economy - 15th Oct 20
Is Gold Market Going Back Into the 1970s? - 15th Oct 20
Things you Should know before Trade Cryptos - 15th Oct 20
Gold and Silver Price Ready For Another Rally Attempt - 14th Oct 20
Do Low Interest Rates Mean Higher Stocks? Not so Fast… - 14th Oct 20
US Debt Is Going Up but Leaving GDP Behind - 14th Oct 20
Dell S3220DGF 31.5 Inch VA Gaming Monitor Amazon Prime Day Bargain Price! But WIll it Get Delivered? - 14th Oct 20
Karcher K7 Pressure Washer Amazon Prime Day Bargain 51% Discount! - 14th Oct 20
Top Strategies Day Traders Adopt - 14th Oct 20
AMD is KILLING Intel as Ryzen Zen 3 Takes Gaming Crown, AMD Set to Achieve CPU Market Dominance - 13th Oct 20
Amazon Prime Day Real or Fake Sales to Get Rid of Dead Stock? - 13th Oct 20
Stock Market Short-term Top Expected - 13th Oct 20
Fun Stuff to Do with a Budgie or Parakeet, a Child's Best Pet Bird Friend - 13th Oct 20
Who Will Win the Race to Open a Casino in Japan? - 13th Oct 20
Fear Grips Stock Market Short-Sellers -- What to Make of It - 12th Oct 20
For Some Remote Workers, It Pays to Stay Home… If Home Stays Local - 12th Oct 20
A Big Move In Silver: Watch The Currency Markets - 12th Oct 20
Precious Metals and Commodities Comprehensive - 11th Oct 20
The Election Does Not Matter, Stick With Stock Winners Like Clean Energy - 11th Oct 20
Gold Stocks Are Cheap, But Not for Long - 11th Oct 20
Gold Miners Ready to Fall Further - 10th Oct 29
What Happens When the Stumble-Through Economy Stalls - 10th Oct 29
This Is What The Stock Market Is Saying About Trump’s Re-Election - 10th Oct 29
Here Is Everything You Must Know About Insolvency - 10th Oct 29
Sheffield Coronavirus Warning - UK Heading for Higher Covid-19 Infections than April Peak! - 10th Oct 29
Q2 Was Disastrous. But What’s Next for the US Economy – and Gold? - 9th Oct 20
Q4 Market Forecast: How to Invest in a World Awash in Debt - 9th Oct 20
A complete paradigm shift will make gold the generational trade - 9th Oct 20
Why You Should Look for Stocks Climbing Out of a “Big Base” - 9th Oct 20
UK Coronavirus Pandemic Wave 2 - Daily Covid-19 Positive Test Cases Forecast - 9th Oct 20
Ryzen ZEN 3: The Final Nail in Intel's Coffin! Cinebench Scores 5300x, 5600x, 5800x, 5900x 5950x - 9th Oct 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Gold and Base Metals Breaking Currency Link

Commodities / Gold and Silver 2010 Jan 20, 2010 - 07:37 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD for Euro investors rose for the third session running in Asia and London on Wednesday, but slipped to $1125 vs. the Dollar as global stock-markets and commodities fell on news of fresh credit tightening by the Chinese authorities.


Liu Mingkang, chairman of the China Banking Regulatory Commission, announced that credit growth will be restricted to CNY 7.5 trillion ($1.1 trillion) in 2010, down by one-fifth from last year's break-neck pace.

New data then showed US factory-gate prices rising 4.4% last month from a year earlier, just shy of analyst forecasts.

White sugar prices here in London touched a two-decade high as traders bet that major importers such as India and Pakistan will soon face shortages.

"The ability of [gold] to remain above its 100-day moving average is a positive signal," says technical analysis from bullion bank Scotia Mocatta.

"[Gold's] 9-day moving average is above the 21-day average, which is a bullish sign for near-term traders," and for silver, "Most technical studies are [also] in buy territory."

Looking at copper and aluminum, "The base metals [also] appear to have largely broken clear of their currency link," writes Leon Westgate at Standard Bank today.

"Prices in both Dollars and Euros have rallied on the back of a combination of the global growth story and signs of genuine demand."

Following China's decision to raise both bank-reserve ratios and short-term bond yields, "We shall control, and we have already controlled, credit growth...with corrective actions to limit excessive exposure," said China's Liu today.

Hong Kong shares lost 2% on the news, and Shanghai equities fell almost 3%.

UK and Eurozone bourses also dropped hard at the start of trade, while the European single currency sank below $1.4140 – its lowest level since mid-August.

"The Euro closed below its 200-day moving average on Tuesday," notes one precious metals dealer in a note.

"The difficulties of operating a collective currency scheme between nations in various stages of economic recovery is becoming more apparent by the day."

Over the 10 years since the Euro was launched, the price of gold, silver and the other precious metals has typically moved in the same direction as the single currency against the US Dollar.

But platinum rose to fresh multi-month highs early Wednesday as physical traders bet on continued growth in the new US exchange-traded fund.

The Gold Price in Euros briefly broke above €800 an ounce for only the third time ever, coming within €13 of December's all-time peak.

Gold priced in British Pounds also rose after the Bank of England signaled that low interest rates and quantitative easing will continue despite the record surge in UK consumer-price inflation reported yesterday.

Claiming that the Bank's £191 billion government-bond purchases have "injected money into the economy [and] averted a potentially disastrous monetary squeeze," governor Mervyn King said in an after-dinner speech last night that "Rather like the Monetary Policy Committee, the owners of [race horse] Quantitativeasing, winner of all three of his races in 2009, have yet to decide how many outings he will have in 2010.

"They are waiting for race conditions to become clearer."

Sterling fell more than 2¢ today from Tuesday's 12-week high of $1.6450 to the Dollar. The gold price for UK buyers unwound yesterday's 0.7% drop to stand unchanged for the week above £695 per ounce.

"There has been much discussion about whether the gold price has already peaked," commented Phillip Klapwijk of London's GFMS Ltd. last week, launching the consultancy's latest 2009 data, "but our base case is that the economic recovery will prove sluggish.

"This suggests that there may be little or no tightening of fiscal and monetary policies this year in a number of the major economies, most pertinently for gold, including the United States."

"Money printing does not make a country rich," says Dr.Marc Faber, the Swiss asset manager and author now based in Thailand, speaking on Bloomberg.

"In terms of purchasing power, in terms of world GDP, the US is going down not up.

"Today the emerging world consumes more oil than the developed world...it has higher car sales...higher semi-conductor sales."

China overtook India in 2009 as the world's No.1 private consumer of physical gold bullion, with sales equating to some 2.0% of China's famously massive household savings.

Looking ahead to 2010 and beyond, growth in global gold mining production "will be marginal and [last year's 6% rise] does not represent a change in trend," says GFMS's Klapwijk.

Gold scrap returning to market from jewelry owners rose 27% last year according to the group's latest analysis, almost matching new jewelry fabrication for the first time since the early 1980s.

But global gold investment demand more than doubled to become the primary source of physical buying – and "Scrap needs much higher prices to stimulate a further rise in supply," Klapwijk believes.

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.


© 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