Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Gold Hits New GBP Record, Correlation with Euro Turns Negative

Commodities / Gold and Silver 2010 Mar 01, 2010 - 07:31 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE WHOLSALE PRICE of physical gold bullion ticked lower Monday lunchtime in London after recording its best Gold Fix in a week for US holders and hitting new all-time highs for UK investors.

European stock markets cut their early gains, while UK and Eurozone government bonds fell.


"All paper currencies will continue to lose their purchasing power as they have over the last 100 years or so," said Swiss investment advisor Marc Faber, now based in Thailand, to the Financial Times in Hong Kong last week.

"I suggest that people accumulate gold. They shouldn't market-time the gold price, because we're going to have volatility...But I will not sell my gold, not for as long as [the current US administration] is structuring fiscal, monetary and foreign policies.

"In the US, I don't think we will have real [positive] interest rates at any time in the next 10 years."

Dropping to an 11-month low on the forex market, the Pound fell beneath $1.48 early Monday after weekend opinion polls showed a "hung parliament" ever more likely – with no single political party in charge – at the UK election that must happen by June.

The Euro also fell hard, down 1.5¢ despite reports of a drop in Eurozone joblessness, stronger manufacturing orders, and an unexpected rise in import prices.

The gold price in Sterling hit a record London Gold Fix above £742 an ounce, some 299% above its price of 1st March a decade ago.

Gold priced in the Euro rose above €26362 an ounce, a record-high monthly start more than 170% above this time in 2000.

"I am confident Greece will successfully refinance itself via the means that we are now studying...involving private partners, public partners, or both," said French finance minister Christine Lagarde in a Sunday interview, before a report in the Wall Street Journal – confirming leaks made two weeks ago – said state-owned banks and private-sector investors from France and Germany may work together to buy €30 billion of Greek bonds.

Greece needs to raise €54 billion this fiscal year.

Over in Athens today, the European Union's finance commissioner, Olli Rehn, told Greek politicians to extend their deeply unpopular spending cuts to reduce their record peace-time deficit.

"Despite what economists everywhere say about being in 'uncharted territory' with quantitative easing," writes Dylan Grice in Société Générale's much-followed Popular Delusions note, quoted today by the FT's Alpha blog, "we know that if you keep monetizing deficits eventually you get inflation, and we know that once you're on that path it can be extremely difficult to get off it.

"The real problem is that inflation is an inherently political variable and that concern over debt sustainability and unfunded welfare obligations leaves us more dependent on politicians than we have been in many decades."

"The bottom line," agrees Steven Barrow at Standard Bank in London, "is that we don't just seem to be standing on the edge of a battle between the market and Greece, but a battle between the market and G20 policymakers.

"With the press speculating that policymakers in the US and UK have lost the battle over [bankers' bonus] compensation, they could get a lot tougher when it comes to market speculation. This could mean that 'speculators' will drift away from more obvious 'speculative' tools like [credit default swaps] to less obvious tools – like Euro shorts."

Latest data from the international money markets show a new record for bearish bets held by speculative players against the Euro, now trading 11% below late Nov.'s peak vs. the Dollar.

Gold stands 9% below its record US-Dollar price of early Dec.

The daily correlation between changes in the Dollar-gold price and the Euro-Dollar exchange rate last week fell into negative territory for the first time in 11 months, analysis by BullionVault shows.

Typically averaging +0.52 on a monthly basis since the start of Jan. 2000, the correlation between Gold and the Euro fell to -0.13 by Friday's finish, meaning that the Euro fell as gold prices rose.

New data from the US gold futures and options market meantime show that the bullish position held by speculative players jumped to a 4-week high by last Tuesday's New York close.

Swelling by 12.6% from a fortnight earlier, the speculative "net long" position – meaning the number of bullish minus bearish contracts held by hedge funds, money managers and private individuals – jumped at its fastest pace since last Sept., rising to the equivalent of 782 tonnes.

Averaging 549 tonnes equivalent since the start of 2005, it peaked above 1000 tonnes equivalent in late Oct. '09.

Interest in exchange-traded gold trust funds failed to revive, however, with the volume of gold bullion held to back shares in Europe's largest gold ETF, the GBS trust, staying unchanged at a 13-month low of 119 tonnes.

New York's SPDR Gold Trust dropped one tonne last week to 1107 tonnes.

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