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
China's Grand Plan to Take Over the World - 19th Nov 19
Interest Rates Heading Zero or Negative to Prop Up Debt Bubble - 19th Nov 19
Plethora of Potential Financial Crisis Triggers - 19th Nov 19
Trade News Still Relevant? - 19th Nov 19
Comments on Catena Media Q3 Report 2019 - 19th Nov 19
Venezuela’s Hyperinflation Drags On For A Near Record—36 Months - 18th Nov 19
Intellectual Property as the New Guild System - 18th Nov 19
Gold Mining Stocks Q3’ 2019 Fundamentals - 18th Nov 19
The Best Way To Play The Coming Gold Boom - 18th Nov 19
What ECB’s Tiering Means for Gold - 17th Nov 19
DOJ Asked to Examine New Systemic Risk in Gold & Silver Markets - 17th Nov 19
Dow Jones Stock Market Cycle Update and are we there yet? - 17th Nov 19
When the Crude Oil Price Collapses Below $40 What Happens? PART III - 17th Nov 19
If History Repeats, Gold is Headed to $8,000 - 17th Nov 19
All You Need To Know About Cryptocurrency - 17th Nov 19
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19

Market Oracle FREE Newsletter

$4 Billion Golden Oppoerunity

Gold Hits New USD High as Europe's "Bail-Out Bounce" Fails

Commodities / Gold and Silver 2010 May 11, 2010 - 12:49 PM GMT

By: Adrian_Ash

Commodities

THE PRICE OF GOLD hit a new record high against the US Dollar at Tuesday's PM Fix in London, surging more than 3% from yesterday's low as world stock markets fell once again with commodities.

The Euro dropped 4¢ from yesterday's "bail-out bounce", giving back most of Monday's gain to trade below $1.27.


Gold priced in Euros touched fresh highs above €30,970 per kilo.

"Gold is bullish, as global financial markets are battling to gain traction," says Walter de Wet at Standard Bank.

"The market still doubts the success of any rescue package put in place in Europe. This is evident in US government bond yields that are pushing lower again as investors flee to safe-haven assets.

US investors wanting to Buy Gold saw the price jump to $1222 by mid-afternoon in London today, beating the previous Gold-Fix peak of $1218 set in Dec. '09.

Adding 3.2% from late-Monday, the gold price in Sterling also came within a few pence of last week's record high at £825 an ounce. But the Pound then spiked sharply on the currency market – undoing an overnight drop – on rumors that the current Labour government "knows" its coalition talks with the Liberal Democrat party "are over".

British government bonds also whipped higher as an apparent Conservative-led coalition looked likely.

"Gold continues to derive gains from the weakness in the Eurozone," says one London dealer in a note.

"Only a close back below $1169 will cause a long liquidation," says the latest technical analysis from bullion bank Scotia Mocatta.

European equity markets recovered a sharp drop to close Tuesday 0.4% lower after Asian shares dropped 1.1%.

US crude oil contracts crept back above $77 per barrel after an early loss.

The silver price extended its gains, meantime, adding 12% from last week's low to come within 40¢ of Dec. 2009's three-decade high at $19.49 an ounce.

"Can the plan work?" asks senior UBS economist George Magnus of the €750 billion 'stabilization mechanism' announced by European leaders as Asian markets began trading yesterday.

"It will work to the extent that Greece is now fully funded for the next 2-3 years and does not have to return to private markets for financing. [But] it will not stop Greek public debt rising to 150% of GDP by 2013. And it will have to be carried out as the Greek economy contracts by at least 10% over the next three years.

"Greece is a complete fiscal disaster," agree Simon Johnson and Peter Boone, former IMF and current MIT economists respectively, writing in the Financial Times and widening the issue to Portugal, Spain, Ireland and "perhaps Italy..."

"We cannot escape the possibility that gold reserves may ultimately form some part of an eventual solution," says the latest Commodities Weekly from French bank Natixis.

"Those Asian central banks which hold excess reserves of Dollars hold negligible quantities of gold...Italy, Germany and France are three of the world's top five holders of gold."

Promising one-third of the Eurozone's €750bn backstop funds, the International Monetary Fund recently sold 18.5 tonnes as part of the 400-tonne sale begun in 2009.

"Call it folly or call it catching a rising tide," says GFMS Analytics director Rhona O'Connell, writing at MineWeb, "but when the IMF sold a total of 23.5 million ounces of gold in the second half of the 1970s it was selling into a seemingly inexorable rising price.

"In this current frenetic environment, investment and speculative appetites are proving hard to sate. If any more IMF metal were to come into this market at the moment it would probably be snapped up."

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