Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
US Bond Market Yield Curve Patterns – What To Expect In 2020 - 25th Feb 20
Has Stock Market Waterfall Event Started Or A Buying Opportunity? - 25th Feb 20
Coronavirus IN Sheffield! Royal Hallamshire Hospital treating 2 infected Patients, UK - 25th Feb 20
Dow Short-term Trend Analysis - Coronavirus Trigger a Stocks Bear Market? - 24th Feb 20
Sustained Silver Rally Coming? - 24th Feb 20
Should Investors Worry about Repo Market and Buy Gold? - 24th Feb 20
Are FANG Technology Stocks Setting Up For A Market Crash? - 24th Feb 20
Gold Above $1,600 Amid FOMC Minutes and Coronavirus Impact - 24th Feb 20
CoronaVirus Pandemic Day 76 Trend Forecast Update - Infected 540k, Minus China 1715, Deaths 4920 - 23rd Feb 20 -
Ways to Find Startup Capital - 23rd Feb 20
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold Hits New 16-Month High vs. Dollars and Sterling ; London Press Fails to Notice

Commodities / Gold & Silver Sep 12, 2007 - 09:48 AM GMT

By: Adrian_Ash


SPOT GOLD PRICES touched a fresh 16-month high in London early on Wednesday, but slipped $3 per ounce to trade at $711.29 as the US open drew near.

The AM Fix came in at $711.75 per ounce, the highest London Fix since 17th May 2006 .

"Precious metals, especially gold, remain a favorite for investors," says today's note from Standard Bank in Johannesburg . "Appetite for the complex is supported by positive sentiment in global equity markets, as well as by significant lingering risk in the underlying financial system."

Breaking above $714 just ahead of the London open, the Gold Market also pushed higher for futures traders at the Japanese Tocom after Prime Minister Shinzo Abe announced his resignation in Tokyo .

Achieving less than a 30% approval rating in a poll earlier this week, Japan 's youngest ever prime minister had vowed to step down if the Japanese parliament failed to support logistical aid for the US-led coalition forces in Afghanistan .

Now Japan "should seek a continued mission to fight terrorism under a new prime minister," Abe told a press conference today.

"Gold buying on the Tocom was triggered by a fall in the Yen," claimed one Japanese trader to Reuters. But in truth, the Yen barely moved on the news of Abe's resignation, slipping less than 0.4% against the Dollar and holding firm against the high-yielding "carry trade" currencies of New Zealand , Australia and Britain .

The Nikkei stock index, in contrast, dropped 0.5% for the day, taking its losses for the last five sessions above 2.1%. The FTSE in London lost 0.6% by lunchtime, while the broad European markets dropped one-third of a per cent.

On the currency markets, the Euro also failed to gain versus the Yen today, despite rising nearly 1% versus the Japanese currency on Tuesday. But the European single currency did reach a fresh life-time high against the US Dollar overnight, finally breaking the peak of $1.3850 set in late July and reaching $1.3889 by 07:45 EST.

"The expected half percent cut in [Dollar] rates means spreads between the US and Euroland are narrowing, removing whatever is left for any positive carry for the Dollar," notes Niels From, a currency strategist in Frankfurt for Dresdner Kleinwort.

"The Fed should cut rates by a half-percentage point as the economy's outlook has worsened," agrees Masashi Kurabe, a currency manager at Bank of Tokyo-Mitsubishi. "European rates may go up as soon as the markets stabilize. A narrowing interest-rate differential is positive for the Euro."

Since its record low of late 2000, the Euro has now risen by 63% versus the greenback. Gold is commonly said by analysts and pundits to merely track the Euro-Dollar exchange rate. But the Spot Gold Price has gained more than 160% in Dollar terms over the same period.

Gold also reached a 16-month high versus the British Pound early on Wednesday, briefly trading above £351 per ounce before slipping to bounce off £349.

The last time gold bullion held this much value for British investors, it had just broken all-time record highs in Sterling above £380 per ounce. But whereas the spike of May 2006 came and went within five days, the current rally in world gold prices remains far more measured – and it's making far fewer headlines as a result.

The same week as Spot Gold Prices spiked to a 26-year high vs. the Dollar in spring of last year, the London press was packed with bullish comment. The move in gold was reported in the Daily Mail and on national BBC radio. John Plender in the Financial Times said gold was "in a long run bull market."

The Guardian 's Larry Elliot agreed, as did Anthony Hilton in the Evening Standard . Allister Heath in The Spectator wrote that "the price of gold will continue to rise." The price duly began falling.

Today, however, the Times of London carries not one word about Tuesday's $10 surge in Dollar gold prices...nor the 1.2% rise against both Sterling and Euros...nor the 1.7% rise in gold against Japanese Yen.

Nor is gold's 5% gain against Sterling during the last month featured in more than a commodities column in the Financial Times , nor even in the equities-bearish Telegraph .

Given the gold market's contrarian fan-base, this lack of press coverage may prove decidedly bullish for the rally starting on Tuesday last week.

By Adrian Ash

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
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 2007

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.

Adrian Ash Archive

© 2005-2019 - 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