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
S&P Stock Market Trend Forecast to Dec 2024 - 16th Apr 24
No Deposit Bonuses: Boost Your Finances - 16th Apr 24
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
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 Trading "Hits Summer Lull" But Dollar-Price "Bull Trend Intact"

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

By: Adrian_Ash


Best Financial Markets Analysis ArticleTHE PRICE OF GOLD in wholesale trading edged lower as the US Dollar also slipped early Monday in London, reversing a 0.5% rise in Asian trade as world stock markets rose with commodity prices.

Crude oil rose sharply to $75 per barrel. Major-economy government bonds fell in price, pushing 10-year interest rates above 3.25% on US Treasuries.

"Blame it on the World Cup or summer lull," says one Hong Kong dealer, "but gold is losing momentum and trading interest is subsiding."

"We're getting into the summer, so I wouldn't be surprised if things quieten down for a while," says Afshin Nabave, head of trading at Swiss refining group MKS Finance.

"But overall, as long as the economic and political situation continues, I think gold has good chance of eventually breaking the $1250-ish area and heading for $1300."

On the currency markets today, the Euro rose above $1.22 for the first time in a week after new data showed Eurozone industrial output rising more quickly than expected in April.

Auditors sent by the European Union and International Monetary Fund arrived in Athens this morning to judge progress in slashing Greece's budget deficit from 14% of GDP to the 2014 target – and EU limit – of 3%.

The British Pound meantime jumped towards 1-month highs above $1.47 after the UK's new, independent Office for Budgetary Responsibility cut the previous government's GDP growth target from 3.25% to 2.60% for 2011, but said the public deficit wouldn't be quite as bad as forecast.

Japan's new prime minister, Naoto Kan, warned in his first major speech on Friday that Tokyo's debt is at "risk of collapse".

"Our country's outstanding public debt is huge. Our public finances have become the worst of any developed country."

Gold priced in Japanese Yen ticked higher on Monday, with Tokyo gold futures ending 1% higher at €3645 per gram, some 1.5% below last week's 27-year high.

UK investors wanting to buy gold for Pounds today saw it drop 1.1% but hold well above Friday's 1-week lows beneath £830 an ounce. The gold price in Euros dropped the same proportion, falling to its lowest level since June 4th at €1001 per ounce (€32,175 per kilo).

"Higher highs and higher lows keep the bullish trend [in Dollar-gold] intact," says technical analysis from bullion bank Scotia Mocatta, noting that Friday saw gold complete its third consecutive weekly rise.

"Silver lacks direction, but gold is in a bull trend, so we would expect the Gold-Silver Ratio to drift higher."

Historically set around 15 ounces of silver to one ounce of gold, the Gold-Silver Ratio averaged nearer 40 during the 20th century. It "actually dropped" last week, says Scotia, "from 69.64 to 67.27."

Silver prices rose towards new June highs against the Dollar early in London on Monday, trading above $18.50 an ounce and pulling the Gold-Silver Ratio down to 66.57.

Agreeing with a note published today by Swiss bank UBS, analysts at Morgan Stanley "continue to like the outlook [for precious metals] in the coming months amid low global interest rates and unresolved Eurozone debt turmoil.

"We expect gold prices to rise on a quarterly average basis for the rest of the year."

By Adrian Ash

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 , 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 - 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