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
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
US China Trade Issues Will Drive Market Trends – PART II - 14th May 19
The Exter Inverted Pyramid of Global Liquidity Credit risk, Liquidity and Gold - 14th May 19
Can You Afford To Ignore These Two Flawless Gold Slide Indicators? - 14th May 19
As cryptocurrency wallets become more popular, will cryptocurrencies replace traditional payments? - 14th May 19
How US Debt Will Reach $40 Trillion by 2025 - 14th May 19
Dangers Beyond a Trade War with China - 14th May 19
eBook - Greatest Tool for Trading? - 14th May 19
Classic Pitfalls for Inexperienced Traders - 14th May 19
Stock Market S&P 500 Negative Expectations Again - 13th May 19
Why Rising Living Standard in China Offers Global Hope - 13th May 19
Stock Market Anticipated Correction Starts On Cue! - 13th May 19
How Chinese Trade Issues Will Drive Stock Market Trends - 13th May 19
Amazon SCAM Deliveries for Fake Verified Purchaser Reviews "Brushing" - 13th May 19
Stock Market US China Trade War Panic - Video - 13th May 19
US Stock Market Leading Macro Economic Indicators Update - 12th May 19
SAMSUNG - BC94.L - Investing in AI Machine Intelligence Stocks - 11th May 19
US Increases Trade Tariffs Against China – Stock Markets, Gold, and Silver - 11th May 19
Who Has More To Lose In A No Deal Brexit? - 11th May 19
Gold at $1,344 Will Start Real Fireworks on the Upside - 11th May 19
Make America’s Economy Great Again - 10th May 19
Big US Stocks’ 2019 Fundamentals - 10th May 19
Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - 10th May 19
Stock Market Shake-Out Continues – Where Is The Bottom? - 10th May 19

Market Oracle FREE Newsletter

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

Gold Rally Pauses on Asian Selling

Commodities / Gold and Silver 2010 Mar 04, 2010 - 07:52 AM GMT

By: Adrian_Ash

Commodities

GOLD PRICES bounced above yesterday's low of $1133 an ounce for US investors early in London trade on Thursday, rising back to $1140 by lunchtime as the Dollar eased back on the forex market and European shares held flat.

UK and Eurozone interest rates were left unchanged by this month's central-bank decisions in London and Frankfurt.


Shanghai equities closed the day 2.4% lower as rumors said the Chinese government will punish banks who lend for stock-market speculation.

"Unlike the start of the week, we're now seeing a greater amount of scrap and physical [gold] selling," reports Standard Bank's commodity note today.

"Long liquidation and physical selling in gold and silver was evident" in Asian trade, agrees a Hong Kong dealer – "a disappointing performance after [Wednesday's] rally in New York."

Euro and British-Pound gold prices were also little changed early Thursday, holding just south of this week's new all-time record highs.

Commodity prices ticked lower as the New York opening approached, holding crude oil futures just above $80 a barrel.

On the debt markets, UK government gilts rose, while German Bunds ticked lower, pushing the yield offered by 10-year notes up to 3.14%.

Ten-year US Treasuries were unchanged, offering buyers 3.62% per year.

"In the US, Friday's payrolls data could feel the brunt of this winter's storms," writes Steven Barrow, chief currency strategist at Standard Bank in London, noting that analysts now forecast the loss of 60,000 jobs in Feb.
 
"[But] the real risks of a genuine double-dip recession are more acute in the Eurozone. We would not be surprised to find that when 'global cooling' disappears, there will be an economic spring in the US – and UK."

February's cold snap was blamed again today for the drop in UK house prices, the first month-on-month drop in 7 according to the Halifax lender.

Sterling meantime traded at $1.50 on Thursday, unmoved by the Bank of England's decision to leave UK interest rates at 0.5% while holding its £200 billion ($300bn) portfolio of government bonds unchanged.

Bought over the last 12 months with newly-created money, the "asset purchase" program has more than matched the UK government's budget deficit for the year.

Greece meantime launched a €5 billion bond issue today, offering a yield fully three percentage points above German bunds.

Some €4.5bn in new government bonds was also auctioned by Spain, which – on top of current funding needs – must refinance over 70% of its outstanding debt this year according to the FT's Alpha blog.

Research from Credit Suisse says Greece, Ireland, Spain and the UK are now "most vulnerable to funding problems" out of the world's developed economies.

"We remain bullish on the longer-term outlook for commodities and the shares of the commodity-oriented companies," said Donald Coxe, strategy advisor at BMO Capital Markets to the group's annual Global Metals & Mining Conference in Hollywood, Florida yesterday.

"But the fragile financial state of many major governments and banks means that we must consider the implications for investment assets at a time when investors are beginning to look forward with trepidation to the time when the flows of what we call 'financial heroin' will slow down before drying up."

Coxe noted that the 2009 peak in US-Dollar gold prices came even as scrap-gold supplies surged and physical demand from India and the rich West collapsed.

"That the gold price can survive during a period of such key fundamental negatives – and in fact increase despite them," writes Lawrence Williams at MineWeb in Jo'burg – "suggests a major underlying confidence in gold as a store of value, and this should continue as long as economic turmoil persists, which may be for some time yet."

Japan's latest government budget today raised the ceiling on how much money can be borrowed to intervene in the currency markets to ¥145 trillion ($1.6trn), but "Japan has not intervened in forex markets since [selling Yen to strengthen the Dollar] in spring 2005," notes BNP Paribas.

"They may just be trying to spread the message that...they could intervene" to depress the Yen from near 15-year highs, said one Tokyo trader to Reuters.

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