Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
UK House Prices Momentum Tory Seats Forecast General Election 2019 - 8th Dec 19
Why Labour is Set to Lose Sheffield Seats at General Election 2019 - 8th Dec 19
Gold and Silver Opportunity Here Is As Good As It Gets - 8th Dec 19
High Yield Bond and Transports Signal Gold Buy Signal - 8th Dec 19
Gold & Silver Stocks Belie CoT Caution - 8th Dec 19
Will Labour Government Spending Bankrupt Britain? UK Debt and Deficits - 7th Dec 19
Lib Dem Fake Tory Election Leaflets - Sheffield Hallam General Election 2019 - 7th Dec 19
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19
What UK CPI, RPI and REAL INFLATION Predict for General Election Result 2019 - 5th Dec 19
Supply Crunch Coming as Silver Miners Scale Back - 5th Dec 19
Gold Will Not Surpass Its 1980 Peak - 5th Dec 19
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19
The Narrative About Gold is Changing Again - 2nd Dec 19
Stock Market Liquidity & Volume Diminish – What Next? - 2nd Dec 19
A Complete Guide To Finding The Best CFD Broker - 2nd Dec 19
See You On The Dark Side Of The Moon - 2nd Dec 19
Will Lib Dems Win Sheffield Hallam From Labour? General Election 2019 - 2nd Dec 19
Stock Market Where Are We?  - 1st Dec 19
Will Labour's Insane Manifesto Spending Plans Bankrupt Britain? - 1st Dec 19
Labour vs Tory Manifesto Debt Fuelled Voter Bribes Impact on UK General Election - 30th Nov 19
Growing Inequality Unrest Threatens Mining Industry - 30th Nov 19
Conspiracy Theories Are Killing This Nation - 30th Nov 19
How to Clip a Budgies / Parakeets Wings, Cut / Trim Bird's Flight Feathers - 30th Nov 19
Hidden Failure of SIFI Banks - 29th Nov 19
Use the “Ferrari Pattern” to Predictably Make 431% with IPOs - 29th Nov 19
Tax-Loss Selling Drives Down Gold and Silver Junior Stock Prices - 29th Nov 19
We Are on the Brink of the Second Great Depression - 29th Nov 19
How to Spot REAL Amazon Black Friday Bargains and Avoid FAKE Sales - 29th Nov 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

Gold Neutral Pending Greece Rescue

Commodities / Gold and Silver 2010 Feb 11, 2010 - 08:39 AM GMT

By: Adrian_Ash


THE PRICE OF WHOLESALE gold bullion held in its tightest range for more than three months in Asia and London on Thursday, treading water as currency traders awaited details of a European rescue deal for Greece.

"There is an agreement on the Greek situation," announced the European Union's unelected president Herman van Rompuy to reporters today.

Apparently led by German chancellor Merkel, the as-yet-unstated deal was brokered with European Commission chief Barroso, French president Sarkozy, Greek premier Papandreou, and European Central Bank chief Jean-Claude Trichet.

"It could be voluntary loans from member states. That seems to be the best option," said Polish prime minister Donald Tusk earlier.

Alternatively, the scheme could keep the cost of rescuing Greece away from sovereign balance-sheets – for the time being, at least – by combining "lending by private banks with a guarantee to be provided by Eurozone members," according to a statement from other EU politicians.

"Short-term developments are neutral for gold," says the latest technical analysis from bullion bank Scotia Mocatta.

Looking at resistance if gold prices rise, "Bears will be focused on $1114, where the December downtrend holds today...corresponding to the metal's 50-day moving average."

Gold priced in Dollars sat tight around $1076 an ounce throughout Asian and London dealing on Thursday, while German and French shares erased early gains as the Euro currency failed to break above $1.3800 for the third time in 3 days.

The gold price in Euros held above €784 an ounce.

"The correlation between the Dollar and gold remains firmly in positive territory," says Barclays analyst Suki Cooper. "Currency movements are likely to lead the gold price trajectory in forthcoming sessions."

Over the last two weeks, gold's correlation with the Euro/Dollar exchange rate has remained strong and positive, rising from its 10-year average of +0.52 to +0.88.

That correlation would stand at +1.00 if gold and the Euro moved perfectly in lockstep vs. the Dollar.

However, and as gold's correlation with silver has also risen – up from the average +0.89 to +0.92 – gold's closest connection has switched to equities.

By Wednesday's New York close, the S&P500 index of US stocks showed a one-month correlation with the daily change in Dollar gold prices of +0.95.

That compares with a 20-year average of almost precisely zero.

Over in Shanghai this morning, "Gold dealing was at a low volume ahead of next week's long [Chinese] holiday," says one broker's note.

"Silver strengthened on the back of robust copper prices in a relatively thin trading."

Silver prices today ticked up to $15.35 an ounce, gaining 4.5% from last week's five-month low.

Copper rose almost 2% in London dealing. US crude oil contracts pushed back above $75 per barrel.

"We focus on risk appetite, using the VIX index, which measures the implied volatility of US equities," says Walter de Wet at Standard Bank today.

"The VIX index is often used as [an inverted] proxy for risk appetite, and it has risen sharply in recent days. Spikes in the VIX index are quiet frequent, but the decline in the VIX index following spikes also occurs fairly rapidly.

"Should the index decline after its recent Greece-related activity, we would look for commodity prices to push higher."

European finance ministers, already due to meet next Tuesday, will receive full details of the Greek rescue by then, according to a Spanish official.

Servicing the public debt will cost Greece more than 11% of its gross domestic product this year, says The Independent newspaper. Civil service unions yesterday led another series of street marches, with further strikes booked for Feb. 24th, in protest at the government's tax hikes and public-sector cuts.

By Adrian Ash

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 , 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 - 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