Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19
It’s Not Technology but the Fed That Is Taking Away Jobs - 16th May 19
Learn to Protect your Forex Trading Capital - 16th May 19
Gold Ratio Charts Offer The Keys to the Bull Market - 16th May 19
Is Someone Secretly Smashing the Stock Market at Night? - 16th May 19
Crude Oil Price Fails At Critical Fibonacci Level - 15th May 19
Strong Stock Market Rally Expected - 15th May 19
US China Trade Impasse Threatens US Lithium, Rare Earth Imports - 15th May 19
Gold Mind Reader's Guide to the Global Markets Galaxy: 'Surreal' - 15th May 19
Trade Wars and Other Black Swan Threats to Your Investments - 15th May 19
Our Long-Anticipated Gold Momentum Rally Begins - 15th May 19
Defense Spending Is Recession Proof - Defense Dividend Stocks - 15th May 19
US China Trade Issues Will Drive Market Trends – PART II - 14th May 19
The Exter Inverted Pyramid of Global Liquidity Credit risk, Liquidity and Gold - 14th May 19
Can You Afford To Ignore These Two Flawless Gold Slide Indicators? - 14th May 19
As cryptocurrency wallets become more popular, will cryptocurrencies replace traditional payments? - 14th May 19
How US Debt Will Reach $40 Trillion by 2025 - 14th May 19
Dangers Beyond a Trade War with China - 14th May 19
eBook - Greatest Tool for Trading? - 14th May 19
Classic Pitfalls for Inexperienced Traders - 14th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Gold Steady Despite Dollar Rally

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

By: Adrian_Ash


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

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 , 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 - 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