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
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
S&P SEASONAL ANALYSIS - 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 Finds Strong Physical Demand Even as U.S. Dollar Rallies

Commodities / Gold and Silver 2010 Mar 30, 2010 - 08:18 AM GMT

By: Adrian_Ash

Commodities

THE PRICE OF GOLD gave back a 0.6% rise as New York trade began on Tuesday, slipping back to $1107 an ounce as world stock markets struggled near 18-month highs and the Dollar rose on the currency market.


Silver Prices earlier rose to their best level since March 18, up 4.4% from last week's low, to hit $17.41 an ounce at the London Fix.

German Bunds rose slightly, UK gilts fell, and US Treasury bonds held flat, with 10-year debt yielding 3.87%.

Crude oil ticked below $82 per barrel.

"Strong underlying physical demand for gold has continued," reports Walter de Wet at Standard Bank in London, "[and] in recent days has become even stronger.

"There is still little scrap coming to market, and selling hasn't been prevalent in 2010."

"Given the lack of scrap, once the Dollar starts to depreciate – which we expect in second-half 2010 – the Gold Price could climb substantially further."

On the data front today, German import prices rose more sharply than expected in Feb., adding 1.0% from Jan.

Raw input prices for Canadian manufacturers also extended their recent rise, defying analyst forecasts of a 1% drop.

Official UK data meantime revised late-2009's economic contraction to 3.1% of annual GDP, rather than the 5.3% first estimated.

Sterling jumped on the news, rising to $1.51 – and adding 3¢ from last week's 10-month low to the Dollar – despite weak poll results for the opposition Conservative Party, widely assumed to be the City's choice for this spring's General Election.

The Euro failed to hold an early 1-week high, in contrast, after last week's aid package for Greece did little to reduce Athens' financing costs in the bond market, and the Irish government began operating an €81 billion "bad bank" housing bad real-estate loans made before the global financial crisis.

Gold priced in Euros held above €823 an ounce, trading within 2% of this month's new all-time high.

The Gold Price in Sterling slipped to £734 an ounce, down 1.7% from last Friday's finish – its second-highest weekly close.

"Gold is one of those things that pops up in times when there's uncertainty and crisis," says Kimberly Sterling, a financial planner at Resource Consulting Group in Orlando, to the Orlando Sentinel today.

"It is like someone who bought real estate in 2006, at the height of that bubble. You could get hurt really badly...When it pops, it is too late to get in."

"I disagree that this is a bubble we're seeing now," says Al Baker chief investment officer for another local advisor, Resource Group of Winter Park.

"Bubbles only last a short period of time, a couple of years at most, while a trend builds upon itself and goes higher over time – 10 years in this case."

Over in China, in contrast, "A high savings ratio, plus a lack of alternative investment vehicles, points to a growing interest among the Chinese in commodity investment," notes Rhona O'Connell of the GFMS Analytics consultancy, writing at MineWeb.

"Gold Coins and bar hoarding have been growing strongly in recent years, but it is believed that the amount of gold currently in private hands is much lower than that in countries such as India and Vietnam."

Reporting on the new World Gold Council research on China's booming gold demand, "The domestic market is by no means mature," says O'Connell, "and the implication is that Chinese investors are much less likely to sell into strength than some of their counterparts elsewhere."

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.


© 2005-2022 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