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
VR and Gaming Becomes the Metaverse - 7th Dec 21
How to Read Your Smart Meter - Economy 7, Day and Night Rate Readings SMETS2 EDF - 7th Dec 21
For Profit or for Loss: 4 Tips for Selling ASX Shares - 7th Dec 21
INTEL Bargain Teck Stocks Trading at 15.5% Discount Sale - 7th Dec 21
US Bonds Yield Curve is not currently an inflationist’s friend - 7th Dec 21
Omicron COVID Variant-Possible Strong Stock Market INDU & TRAN Rally - 7th Dec 21
The New Tech That Could Take Tesla To $2 Trillion - 7th Dec 21
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Steady Despite Dollar Rally

Commodities / Gold and Silver 2010 Sep 23, 2010 - 08:38 AM GMT

By: Adrian_Ash

Commodities

THE PRICE OF GOLD sat tight above $1290 an ounce in London on Thursday morning, holding 1.4% above last week's close as European stock markets extended their losses to 1.2% and crude oil dropped below $74 per barrel.

"Gold has remained fairly steady around yesterday's closing level, in spite of a stronger Dollar," says one London dealer in a note.


"A quiet session overnight," says another, with gold "basically tracking the Euro" against the US Dollar as Tokyo and Hong Kong joined Shanghai in closing for a holiday.

The Dollar today knocked the Euro 0.5¢ off Wednesday's 24-week high above $1.34, but it fell back against the Japanese Yen.

New data meantime revealed a downturn in European services and manufacturing output, a further decline in UK mortgage and business lending, plus higher-than-expected US jobless claims for last week.

"Gold was, and is, used as a symbol of status and value, and the basis for that is its rarity," said BBC business editor Adam Shaw on Radio 4's agenda-setting Today program this morning.

"A government [in contrast] can print as much money as they like, flooding the market and undermining the currency's value."

Examining Tuesday's US Federal Reserve statement, "The Fed had indicated previously that further quantitative easing would be conditional upon a worsening of the economy," says the latest Commodities Weekly from Natixis bank.

But "Their message this week suggested this was not necessary...suggest[ing] that quantitative easing may commence imminently."

"In the race to the bottom in the game of currency devaluation, the US continues to pull ahead," says RBS's Global Views report.

"Japan fought back valiantly with its unsterilized intervention a week ago...[and] the Eurozone has lost ground for the time. [But] with all the major currencies looking shaky, gold is hitting new highs."

"The evils of inflation are well known...and inflation [is] above target and expected to remain so until the end of next year," said Bank of England policy-maker Spencer Dale in a speech to business leaders in Cardiff, Wales last night.

"I recognize that reassuring words and good intentions are not enough," he said, before delivering a technical presentation on pricing models and theory.

The Bank of England has now kept base rate at a record low of 0.50% for 18 months running. Consumer price inflation has exceeded the Bank's upper tolerance of 3.0% per year for 9 months in succession.

On a trade-weighted basis, the British Pound has dropped one-fifth of its exchange-rate value since the UK banking crisis began three years ago this month.

The gold price in Sterling today held above £821 an ounce, more than 32% higher from March 2009, when the Bank launched its own quantitative easing.

"The conditions for a major appreciation of the Renminbi do not exist," said Chinese premier Wen Jiabao, rebutting calls for a 20% rise in his currency (also called the Yuan) ahead of meeting US president Barack Obama at the United Nations in New York today.

"The main reason for the US trade deficit with China is not the Renminbi exchange rate, but the structure of trade and investment between the two countries."

Over in Dublin, meantime, Irish finance minister Brian Lenihan suggested today that the lowest-ranking creditors to Anglo Irish Bank will not be repaid in full.

Default insurance on Irish banks leapt, and yield spreads on Irish government bonds jumped to new records above comparable German debt.

By Adrian Ash
BullionVault.com

Gold price chart, no delay   |   Buy gold online at live prices

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