Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Will Fed‘s Cap On Interest Rates Trigger Gold’s Rally? - 30th May
Is Stock Market Setting Up for a Blow-Off Top? - 29th May 20
Strong Signs In The Mobile Gaming Market - 29th May 20
Last Clap for NHS and Carers, Sheffield UK - 29th May 20
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Gold Extremely Choppy, Hit by Fund Liquidations

Commodities / Gold and Silver 2010 Feb 08, 2010 - 07:43 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD reversed an early 0.8% gain in London on Monday, revisiting Friday's finish of $1066 per ounce in what dealers called "lackluster" but "choppy" trade after last week's "widespread liquidation."

European stock markets also gave back an initial rally, while the US Dollar held the Euro near Friday's new 9-month lows.


The Japanese Yen extended its 10% surge of the last 3 weeks vs. the Euro.

"Gold did not get its usual double hit from a commodity-related sell-off plus distressed selling," writes Walter de Wet at Standard Bank in his latest Precious Metals Monthly.

"Rather, the falls [so far] in February were massively exacerbated by stop-loss trading."

Falling through what many technical analysts had called "strong support" between $1070 and $1075 last week, the gold price also slipped below the 15-month uptrend it began when the collapse of Lehman Bros. sparked huge gold investment demand in late 2008.

"Gold remains above its 200-day moving average," says one bank analyst today. "That comes in at $1023 an ounce."

"Gold looks firmer than silver," says another, noting that silver fell through its 200-day average on Thursday.

Government-bond prices also slipped early Monday, while crude oil and base metals were little changed, down 1.6% and 6.4% respectively from the start of last week.

Open interest in Comex gold futures and options shrank yet again last week, new data showed after Friday's New York close, dropping to a four-month low and contracting by 11% inside a fortnight by Tuesday's finish.

So-called "speculative" players – meaning non-commercial traders such as hedge funds and private investors – cut their bullish betting for the third week running, shrinking their "net long" position to 5-month low equivalent to 803 tonnes of bullish minus bearish beats.

That speculative position peaked above 1020 tonnes in late October. It has been cut by more than 22% since mid-Jan.

New York's SPDR Gold Trust ETF meantime regained two of the seven tonnes it had sold last week, but its holdings still shrank 0.5% overall to stand 2.5% below last June's peak of 1134 tonnes.

London's GBS trust – cross-listed across most of Europe's major bourses – dropped another two tonnes to stand at 121 tonnes, almost one-eighth below its record peak of June '09.

"Gold's grass roots activity is meeting alternate waves of buying and selling," says De Wet, "pointing to a period of extremely choppy trading.

"There is strong bargain-hunting going on after the fall, however, and gold's longer-term role as a risk-hedge is gaining increasing traction."

By lunchtime in London on Monday, gold was unchanged from last week's finish against all major currencies, trading at €780 and £683 an ounce for Euro and UK investors looking to buy gold today.

"I would like to believe that we have a reasonable underpin where we are and that the gold price can go higher from here," said Nick Holland, CEO of South Africa's Gold Fields mining company to Mining Weekly Online last week.

"There'll be continued growth of new [investment] funds looking to have a piece of gold...But I think we have to make peace with [much lower] jewelry demand."

The correlation of gold with other financial assets has risen sharply so far in Feb., with the daily connection between gold and the S&P500 stock index rising above gold's correlation with the Euro currency and even silver last week.

US stock futures pointed lower as the New York opening approached on Monday, while London's FTSE100 today reversed an early 1% rise, slipping back to last week's 3-month closing low at 5060 points.

"It's important to remember that equity values, stock prices, are not just paper profits," says former US Fed chairman Alan Greenspan, credited in a new biography , Panderer to Power, with developing the "asymmetric" US policy of never raising interest rates to prick an asset-price bubble, but always cutting rates after the bubble bursts.

"Stocks actually have a profoundly important impact on economic activity," Greenspan told NBC's Meet the Press yesterday, and a drop in stocks "is more than a warning sign."

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