Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19
It’s Not Technology but the Fed That Is Taking Away Jobs - 16th May 19
Learn to Protect your Forex Trading Capital - 16th May 19
Gold Ratio Charts Offer The Keys to the Bull Market - 16th May 19
Is Someone Secretly Smashing the Stock Market at Night? - 16th May 19
Crude Oil Price Fails At Critical Fibonacci Level - 15th May 19
Strong Stock Market Rally Expected - 15th May 19
US China Trade Impasse Threatens US Lithium, Rare Earth Imports - 15th May 19
Gold Mind Reader's Guide to the Global Markets Galaxy: 'Surreal' - 15th May 19
Trade Wars and Other Black Swan Threats to Your Investments - 15th May 19
Our Long-Anticipated Gold Momentum Rally Begins - 15th May 19
Defense Spending Is Recession Proof - Defense Dividend Stocks - 15th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Gold and Silver Fall Again Towards Major Support

Commodities / Gold and Silver 2010 Jan 26, 2010 - 08:29 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD fell against all currencies except the Euro early in London on Tuesday, dropping near 4-week lows at US$1083 per ounce as the Japanese Yen and US Dollar rose, and world stock markets slipped yet again.

Crude oil dropped further below $75 per barrel while government bonds rose worldwide.


The Bank of Japan left interest rates in the world's second-largest economy at 0.1% for the 13th month running.

Britain reported an end to the UK's longest recession since the 1930s, thanks only to economic growth of 0.1% during the last 3 months of 2009.

"Gold and silver have erased their year-to-date gains," notes Walter de Wet at Standard Bank, "while platinum and palladium are still up 4.5% and 7.1% respectively."

Silver prices today fell for the fourth time in 5 sessions, dropping over 12% from last week's high to trade at the lowest level since late October at $16.58 an ounce.

The net bullish position held by speculative traders in New York gold derivatives last week fell 22 tonnes to 777 tonnes, notes Standard Bank's de Wet, falling as a percentage of all open contracts to 33% from 35% a week earlier.

That ratio hit all-time record peaks above 42% in late Sept. '09.

Overall, global speculation in gold futures, options and exchange-traded trust funds worldwide eased back by 0.5% last week, says the latest analysis from London's VM Group, published in its Precious Metals Weekly for Fortis Nederland Bank.

Speculative buying in Japan's Tocom gold market "bucked the trend," the consultancy adds, but "since our cut off date [of last Tuesday] it has also fallen back...suggesting investors there may be as nervous as elsewhere about the sustainability of the gold price rally."

Tokyo's 12-month gold futures today slipped a further 0.3% in price, ending the session just above a 12-week low at ¥3163 per gram.

Tokyo's Nikkei share index meantime fell for the fourth session running, closing a full 6.0% below last week's 15-month high.

China's Shanghai stock market had earlier dropped 2.4% on news that domestic banks had been ordered to further increase the proportion of depositors' money kept back in reserve.

"It was later clarified that this was simply an implementation of an earlier decision and that no new banks had been affected," says Gareth Berry, a UBS analyst.

"Markets took no chances however."

Here in London today, the FTSE100 stock index dropped to its lowest level since mid-Dec., as did 10-year UK gilt yields, pushed down to 3.85% as investors switched from shares to bonds.

After Monday's auction of Greek sovereign debt met strong demand from investors thanks to its 6.0% annual coupon, Fitch Ratings notes that Eurozone governments need to raise €2.2 trillion from the bond market this year, a rise of 3.7% from 2009's record level.

Standard & Poor's today cut its "outlook rating" on Japan's government debt to "negative" from "stable", calling Tokyo the "world's largest net external creditor."

"Remember, if something is too big to fail it is too big to exist," says CLSA's Christopher Wood in his much-followed Fear & Greed letter to clients, warning that global banking reform is likely to mean "structurally lower returns on equity" for banking stockholders.

"That is something Joe Sixpack can understand even it remains a point hard to grasp for the sophisticates in New York and Washington and the rest of the Davos Crowd."

Technical analysis from one major dealers' team in London today says that "Major support for gold at $1070 is now coming into play."

"From a technical point of view, we're in a tricky area," says another trader, speaking to Reuters. "There's support at $1075 an ounce."

MKS Finance in Geneva pegs nearby support for the gold price at $1080 and then $1065 an ounce.

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