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

Gold Price Crash on Sovereign Debt Contagion and Economic Growth Risk

Commodities / Gold and Silver 2010 Feb 05, 2010 - 04:36 AM GMT

By: GoldCore


Best Financial Markets Analysis ArticleGold fell sharply yesterday and is trading at $1,052/oz. In Euro and GBP terms, gold is trading at €770/oz and £673/oz. Support for gold is currently seen at $1,025/oz to $1,030/oz and resistance at $1,115/oz.

Equity markets internationally are tumbling amid sovereign debt default risk and global recovery doubts. Gold sold off yesterday as traders liquidated positions en masse and large stop loss positions were triggered. Gold was down 4% in US dollar terms but by much less in other currencies as the dollar strengthened considerably. Risk aversion has spread from Asia to Europe this morning as markets sold off following Thursday's sharp losses on Wall Street and in Europe. Investors eagerly await the non-farm payroll numbers in the US later today to give guidance.

The selloff in gold will come as no surprise as in recent years gold has exhibited a strong correlation with equities in the short term. Traders in the futures market will quickly get out of all positions and go to cash in order to protect leveraged positions. However, gold's long term inverse correlation with equities remains in place. What has happened in recent years is that gold falls in unison with equities initially but does not keep falling as much as equity markets and then has recovered from its selloff quicker than equities.

Given the degree of physical demand seen internationally and particularly in Asia this pattern is likely to be repeated as bargain hunters use this sell off to enter the market. Given the degree of macroeconomic risk in the world and particularly the real risk of a major sovereign default, gold will be seen by some as attractive at these levels. Support is at the 200 day moving average at $1,018/oz and at previous very strong resistance at $1,030/oz.

Silver is trading at $15.15/oz In euro and GBP terms silver is trading at €11.07/oz and £9.66/oz.

Platinum Group Metals
Platinum is trading at $1,477/oz while rhodium and palladium are trading at $2,450/oz and $430/oz respectively.

Oil prices fell below $73 a barrel Friday in Asia today after a major sell-off the previous day as investors dumped stocks and commodities amid doubts about the global economic recovery.

G-7 officials gather to discuss the myriad of challenges facing the global financial system and economy. Issues to be discussed include Chinese currency revaluation, global regulation, massive US debt levels and sovereign debt risk in Greece and elsewhere.
Job losses from the Great Recession are about to get worse as the US government revises employment data. The number of jobs lost in the year that ended in March 2009 is expected to rise by roughly 800,000, raising the number of jobs shed during the recession to around 8 million.

The risk of growing protectionism (which contributed to a deepening of the Great Depression) remains pronounced as China announced anti-dumping steps on US chicken and China complained to the WTO over the EU's treatment of Chinese footwear.

Geopolitical tension between China and the US has increased with the ongoing Tibet tension and now the Google censorship and Taiwan arms deal increasingly contentious issues.

This update can be found on the GoldCore blog here.

The Bullion Services Team




IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160


WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore 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