Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Bounces from "Surprise" Euro-Gold Liquidation, Physical Buying "Strong" Near $1200

Commodities / Gold and Silver 2010 Jul 02, 2010 - 07:26 AM GMT

By: Adrian_Ash

Commodities

WHOLESALE GOLD rallied in early London dealing on Friday, rising 1.2% from yesterday's sharp drop to 6-week lows and holding steady as new US data showed 125,000 jobs being lost in May, with unemployment standing just shy of 1-in-10.


The Euro extended its gains on the currency market, while European stock markets bounced from this week's 5% drop towards 9-month lows and major-economy government bonds eased back.
 
US crude oil contracts slipped further, but both base and precious metals dealers reported "bargain hunting", with one calling physical gold demand "strong" around $1200 an ounce.

Silver prices briefly crept above $18.00 after losing more than a dollar-per-ounce to a 3-week low of $17.73 late Thursday.

"All metals rebounded in Asia because of Chinese buying," says a note from Mitsui in Hong Kong. "Customers are mainly looking for physical gold and palladium, with little interest in platinum."

Thursday – the first day of the third quarter – saw gold prices slump and the Euro jump after ending the first-half of 2010 some 13% higher and 14% lower respectively against the Dollar.

"Gold's sell-off was violent," says Walter de Wet at Standard Bank. "We were surprised by the speed and the depth.

"The strength of the Euro saw large-scale liquidation of long Euro-Gold positions" – a trade widely advised by bank analysts as the Greek debt crisis intensified in early spring.
 
Speculative betting against the Euro peaked in mid-May with a "net short" position worth 40% of all EUR/USD contracts on the CME's International Money Market, slipping back to 21% by the last week of June.

Speculative betting in US gold futures and options meantime jumped to a near-record "net long" position, rising by 3.2% and reaching the equivalent of 1016 tonnes by June 22nd in what VM Group analysts calls "a healthy dose of speculative activity".

Thursday saw the Euro regain three of the 25¢ it's lost vs. the Dollar since New Year's Day.

Gold priced in Euros dropped 5.8% – its sharpest one-day loss since Oct. 2008 – sinking to a five-week low of €30,740 per kilo.

"There hasn't really been a trade off for people to call positions in gold yet. We [were] aimlessly waiting in vain for dips," said David Hall, head of Credit Agricole's private bank FX and precious metals team, to CNBC this morning.

"If you look at the [10-year] chart and you re-base gold at a 100 versus the Dow Jones, it's been a place to hide."

Thursday's sharp drop in the gold price saw New York's SDPR Gold Trust – the world's largest gold ETF trust – shed 0.1% of the gold backing its shares, the first decline in 11 weeks.

From the start of the year, the fund's hoard, which is held at HSBC bank in London, has swollen by 16% to a record 1319 tonnes.

"People like gold when it's all a bit chaotic out there," says Sean Butler, investment director of New Zealand's Liontamer group, launching a new structured product with a six-year lock-up – "the first local index offering exposure to international price movements in gold," according to the National Business Review.

"Gold is widely used as a safe haven for investors, especially during volatile economic conditions and times where there is uncertainty about major currencies like we are currently experiencing with the Euro."

Over the next 30 months, says Barclays Capital, maturing debt will cost Eurozone banks €1.5 trillion.

This month's "stress tests" on Eurozone institutions will force up to 20 banks to raise some €30 billion between them to meet capital requirements, the Financial Times reports.

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