Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Covid, Debt and Precious Metals - 3rd Jun 20
Gold-Silver Ratio And Correlation - 3rd Jun 20
The Corona Riots Begin, US Covid-19 Catastrophe Trend Analysis - 3rd Jun 20 -
Stock Market Short-term Top? - 3rd Jun 20
Deflation: Why the "Japanification" of the U.S. Looms Large - 3rd Jun 20
US Stock Market Sets Up Technical Patterns – Pay Attention - 3rd Jun 20
UK Corona Catastrophe Trend Analysis - 2nd Jun 20
US Real Estate Stats Show Big Wave Of Refinancing Is Coming - 2nd Jun 20
Let’s Make Sure This Crisis Doesn’t Go to Waste - 2nd Jun 20
Silver and Gold: Balancing More Than 100 Years Of Debt Abuse - 2nd Jun 20
The importance of effective website design in a business marketing strategy - 2nd Jun 20
AI Mega-trend Tech Stocks Buying Levels Q2 2020 - 1st Jun 20
M2 Velocity Collapses – Could A Bottom In Capital Velocity Be Setting Up? - 1st Jun 20
The Inflation–Deflation Conundrum - 1st Jun 20
AMD 3900XT, 3800XT, 3600XT Refresh Means Zen 3 4000 AMD CPU's Delayed for 5nm Until 2021? - 1st Jun 20
Why Multi-Asset Brokers Like TRADE.com are the Future of Trading - 1st Jun 20
Will Fed‘s Cap On Interest Rates Trigger Gold’s Rally? - 30th May
Is Stock Market Setting Up for a Blow-Off Top? - 29th May 20
Strong Signs In The Mobile Gaming Market - 29th May 20
Last Clap for NHS and Carers, Sheffield UK - 29th May 20
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Gold Price Falls to 3 Month Low

Commodities / Gold and Silver 2010 Jul 28, 2010 - 07:48 AM GMT

By: Adrian_Ash

Commodities

THE PRICE OF GOLD held near 3-month lows against all the world's major currencies on Wednesday in London, recovering little of yesterday's 2.2% drop.

Soft commodities and base metals rallied from their sell-off, but silver prices held at a 3-session low almost 4% beneath Tuesday's start, while an early gain faded in European stock markets.


The Euro currency flipped either side of $1.30 to the Dollar. Gold priced in Euros held near €28,800 per kilo – some 15% off its record top of last month.

"Gold was driven down through its long-term bullish trendline as liquidation swept the commodities markets," says Mitsui's London dealing desk in its precious-metals note today.

"Physical demand should support here, but with the third quarter largely absent of major gold buying holidays and festivals in physical centres [such as India], the risk remains to the downside."

In the gold investment market, "Those with weak hands have been, to a large extent, swept away from the market," counters Société Générale. Analyzing last week's Commitment of Traders data, the French bank's analysts note that "at just below 30.5%, the speculative proportion of total open interest [in US gold futures contracts] is at its lowest since the end of 2007.

"This opens the possibility of renewed interest in coming weeks. It also, though, means that the potential for swift short-covering rallies [which would squeeze prices higher] has been reduced."

Short term, HSBC's gold analysts say in a note, "With many traders on holiday, and the rollover from the August gold futures to the December futures in full swing, there is...a strong technical element to the recent slide in prices.

"This also has increased the influence of momentum and other technically generated trading," the bank is quoted by Reuters, "which has tended to favor the downside as the market has weakened. In the near term, this may continue."

Back in the currency market on Wednesday, the British Pound rose to $1.56 – its best level since mid-Feb. – despite Bank of England governor Mervyn King vowing to keep UK interest rates at historic, near-zero lows for "some considerable distance" into the future.

"Bank balance sheets are still recovering from the current crisis," he told a parliamentary committee. "The debate is about the appropriate degree of stimulus, not about applying brakes."

The gold price in Sterling held below £750 an ounce – a level first breached on the way up in February.

"A government whose animating spirit was Lloyd George rather than George Osborne would ask the public to subscribe to a National Recovery Loan of £100bn, to be spent over five years," writes John Maynard Keynes biographer and Warwick University professor Robert, Lord Skidelsky in the Financial Times today.

"Austerity in the capital budget is the worst possible remedy for a slump," he says, citing two "big ticket" spending projects announced by London's previous Labour administration, but now halted by the Tory-LibDem coalition.

The International Monetary Fund meantime warned that China's property market may be overheating, but signally removed the word "substantially" from its description of the Chinese Yuan as "undervalued" – a move widely seen as political, rather than analytic.

Tuesday saw the Moody's ratings agency cut its outlook on the Treasury-supported debt of banking giants Wells Fargo, Citibank and Bank of America – plus 10 regional US banks – down to "negative", citing the Dodd-Frank Wall Street Reform Act.

"The intent of Dodd-Frank is clearly to eliminate government – i.e. taxpayer – support to creditors," says Sean Jones, head of Moody's North American bank ratings team.

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