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
Gold Bull Market Ultimate Upside Target - 17th Sep 19
Gold Spikes on the Saudi Oil Attacks: Can It Last? - 17th Sep 19
Stock Market VIX To Begin A New Uptrend and What it Means - 17th Sep 19
Philippines, China and US: Joint Exploration Vs Rearmament and Nuclear Weapons - 17th Sep 19
What Are The Real Upside Targets For Crude Oil Price Post Drone Attack? - 17th Sep 19
Curse of Technology Weapons - 17th Sep 19
Media Hypes Recession Whilst Trump Proposes a Tax on Savings - 17th Sep 19
Understanding Ways To Stretch Your Investments Further - 17th Sep 19
Trading Natural Gas As The Season Changes - 16th Sep 19
Cameco Crash, Uranium Sector Won’t Catch a break - 16th Sep 19
These Indicators Point to an Early 2020 Economic Downturn - 16th Sep 19
Gold When Global Insanity Prevails - 16th Sep 19
Stock Market Looking Toppy - 16th Sep 19
Is the Stocks Bull Market Nearing an End? - 16th Sep 19
US Stock Market Indexes Continue to Rally Within A Defined Range - 16th Sep 19
What If Gold Is NOT In A New Bull Market? - 16th Sep 19
A History Lesson For Pundits Who Don’t Believe Stocks Are Overvalued - 16th Sep 19
The Disconnect Between Millennials and Real Estate - 16th Sep 19
Tech Giants Will Crash in the Next Stock Market Downturn - 15th Sep 19
Will Draghi’s Swan Song Revive the Eurozone? And Gold? - 15th Sep 19
The Race to Depreciate Fiat Currencies Is Accelerating - 15th Sep 19
Can Crypto casino beat Hybrid casino - 15th Sep 19
British Pound GBP vs Brexit Chaos Timeline - 14th Sep 19
Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - 14th Sep 19
War Gaming the US-China Trade War - 14th Sep 19
Buying a Budgie, Parakeet for the First Time from a Pet Shop - Jollyes UK - 14th Sep 19
Crude Oil Price Setting Up For A Downside Price Rotation - 13th Sep 19
A “Looming” Recession Is a Gold Golden Opportunity - 13th Sep 19
Is 2019 Similar to 2007? What Does It Mean For Gold? - 13th Sep 19
How Did the Philippines Establish Itself as a World Leader in Call Centre Outsourcing? - 13th Sep 19
UK General Election Forecast 2019 - Betting Market Odds - 13th Sep 19
Energy Sector Reaches Key Low Point – Start Looking For The Next Move - 13th Sep 19
Weakening Shale Productivity "VERY Bullish" For Oil Prices - 13th Sep 19
Stock Market Dow to 38,000 by 2022 - 13th Sep 19 - readtheticker
Gold under NIRP? | Negative Interest Rates vs Bullion - 12th Sep 19
Land Rover Discovery Sport Brake Pads and Discs's Replace, Dealer Check and Cost - 12th Sep 19
Stock Market Crash Black Swan Event Set Up Sept 12th? - 12th Sep 19
Increased Pension Liabilities During the Coming Stock Market Crash - 12th Sep 19
Gold at Support: the Upcoming Move - 12th Sep 19
Precious Metals, US Dollar, Stocks – How It All Relates – Part II - 12th Sep 19
Boris Johnson's "Do or Die, Dead in a Ditch" Brexit Strategy - 11th Sep 19
Precious Metals, US Dollar: How It All Relates – Part I - 11th Sep 19
Bank of England’s Carney Delivers Dollar Shocker at Jackson Hole meeting - 11th Sep 19
Gold and Silver Wounded Animals, Indeed - 11th Sep 19
Boris Johnson a Crippled Prime Minister - 11th Sep 19
Gold Significant Correction Has Started - 11th Sep 19
Reasons To Follow Experienced Traders In Automated Trading - 11th Sep 19
Silver's Sharp Reaction Back - 11th Sep 19
2020 Will Be the Most Volatile Market Year in History - 11th Sep 19
Westminister BrExit Extreme Chaos Puts Britain into a Pre-Civil War State - 10th Sep 19
Gold to Correct as Stocks Rally - 10th Sep 19
Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - 10th Sep 19
Stock Market Sector Rotation Giving Mixed Signals About The Future - 10th Sep 19
The Online Gaming Industry is Going Up - 10th Sep 19

Market Oracle FREE Newsletter

The No1 Tech Stock for 2019

Gold "Strengthened" by New Euro Crisis; Still "Early Days" for Global Gold Investment

Commodities / Gold and Silver 2010 May 14, 2010 - 07:56 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleWHOLESALE GOLD BULLION PRICES rose to new record highs against all major currencies Friday morning in London, as world stock markets fell amid the ongoing Eurozone crisis.

The Euro sank through $1.25 – an 18-month low to the Dollar – as Spain's El Pais reported that French president Sarkozy threatened to quit the currency union last weekend unless Germany agreed to the €750 billion "stabilization" package.


"France, Italy and Spain formed a common front against Germany," the paper quotes private remarks from Spanish prime minister Zapatero, "and Sarkozy threatened [German chancellor] Merkel with breaking the traditional German-French axis."

Investment-gold prices on the international wholesale market this morning broke €1000 an ounce for Euro investors and touched £860 against Sterling

The Dollar price of gold came within 30¢ of $1250 an ounce.

"You have the great problem of a potential disintegration of the Euro," said former US Federal Reserve chief Paul Volcker in a speech in London last night

Deutsche Bank's CEO Josef Ackermann yesterday told ZDF television that "I doubt Greece will be in a position" to repay its debts.

Writing for Standard Bank today, "We expect the Euro to reach $1.20 within the next three months," says Walter de Wet, "[because] the Dollar is the beneficiary of the increased sovereign credit risk in Europe."

Noting Friday's drop below $73 per barrel, "Crude oil remains sensitive to Dollar strength," says de Wet. "A stronger Dollar against the Euro could weigh on nearby [i.e. short-term] crude oil prices."

For gold, in contrast, the "relationship with the Dollar/Euro exchange rate remains negative, so Euro weakness results in gold strength.

"Sovereign credit risk is clearly dominating."

The gold price in Euros today rose above €32000 per kilo (and beat €1000 an ounce), adding 5.6% from last Friday's finish.

UK and Swiss investors buying gold today also saw the price hit new record highs, rising 5.4% and 4.8% for the week respectively.

Gold priced in Japanese Yen held below Wednesday's 30-year peak, but added 4.3% from last Friday's Tokyo close.

"Gold and platinum prices withstood Tokyo futures and physical selling," says one Japanese dealer in a note.

"We are probably witnessing a flight from the European currency in search of a better reserve currency, gold," says an Italian bullion dealer.

A survey of Japanese fund managers by Bloomberg News today showed Tokyo institutions favoring US over Eurozone bonds for the first time since Oct. 2007.

"Investors appear to still be skeptical about the rescue plan," says Yoshio Takahashi, fixed-income strategist at Barclays.

Friday morning saw the MSCI index of Eurozone stocks drop 2.3% from Thursday's close, but remain higher for the week.

German Bund prices rose sharply, pushing the yield offered by 10-year debt back down to last week's 15-month lows. Greek bond yields, in contrast, spiked higher again as prices fell.

Over in India, meantime – source of gold's single largest consumer demand each year –record-high Rupee prices have dented gold buying for the traditionally strong Hindu festival of Akshaya Tritiya.

"Forget buying for the festival, on the contrary people are selling," says Suresh Hundia, president of the Bombay Bullion Association.

"There is a queue of sellers."

Looking at global demand-supply flows in the gold market, however, "Jewelry wasn't always the big demand in gold," said Martin Murenbeeld, economist at Dundee Wealth, in a speech this week to the Canadian Institute of Mining, Metallurgy and Petroleum's conference in Vancouver.

"That's a relatively recent phenomenon," he's quoted by MineWeb. "So I don't worry so much about jewelry demand decline...I believe commodities in general, gold specifically, are morphing into an investment asset class, so they're going to be held in portfolios.

"We are in the early days of investment demand."

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