Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
This Dividend Aristocrat Is Leading the 5G Revolution - 22nd July 19
What the World Doesn’t Need Now is Lower Interest Rates - 22nd July 19
My Biggest 'Fear' For Silver - 22nd July 19
Reasons to Buy Pre-Owned Luxury Car from a Certified Dealer - 22nd July 19
Stock Market Increasing Technical Weakness - 22nd July 19
What Could The Next Gold Rally Look Like? - 22nd July 19
Stock Markets Setting Up For A Volatility Explosion – Are You Ready? - 22nd July 19
Anatomy of an Impulse Move in Gold and Silver Precious Metals - 22nd July 19
What you Really need to Know about the Stock Market - 22nd July 19
Has Next UK Financial Crisis Just Started? Bank Accounts Being Frozen - 21st July 19
Silver to Continue Lagging Gold, Will Struggle to Overcome $17 - 21st July 19
What’s With all the Weird Weather?  - 21st July 19
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Gold New Dollar Highs as Global Currency War Intensifies

Commodities / Gold and Silver 2010 Oct 06, 2010 - 08:01 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD rose to fresh Dollar records above $1350 an ounce early Wednesday, hitting its 16th new all-time high in 17 trading days at the London Fix this morning.

Global stock markets also rose, as did major-economy government bonds, while the US Dollar slipped and commodities held flat.


Silver prices touched their best level since 24 Sept. 1980 above $23 per ounce.

"Gold is now outpacing its long-term drivers," says today's note from Walter de Wet at Standard Bank, pointing once more to low global interest rates and money-supply liquidity – but "not necessarily inflation – as the key factors pushing gold higher.

"The gold price has been rising much faster than liquidity [so] we are certainly more cautious with gold at these levels. Speculative length [in the derivatives market] is building, and scrap gold continues to come to the market."

Short-term, "I wouldn't be surprised if we saw $1360 this week," says Carlos Sanchez at the CPM Group in New York, quoted by CNN.

"I think we'll see $1400 by the end of the year."

But "Sell, sell, sell," counters a trader quoted by the professional Platts newswire in London, adding that "It's over-done" on technical indicators of price appreciation, and that the UK's Sun tabloid newspaper today mentions gold investment on page 3 – previously reserved for topless glamor models.

Latest data from London's VM Group consultancy shows global gold investment swelling by 0.6% in the week-to-last-Tuesday, with growth in Japan's Tocom derivatives as well as institutional demand for New York futures, plus 2.0% growth in the gold held to back Barclays Global Investors US-listed exchange-traded trust fund.

"Given the continued price strength we expect speculative gold investment to show another rise in the course of this week," says VM's weekly report for ABN Amro Bank.

"Too much gold has been bought in too short a time, particularly by speculators," warns Wolfgang Wrzesniok-Rossbach at the Good Delivery-bar refining group Heraues in Hanau, Germany.

"[But] any correction will most likely be a prelude to the next rally," believes Wrzesniok-Rossbach – the prize-winning speaker at last week's London Bullion Market Association conference in Berlin – because "the general direction will not be changed."

Noting the launch of gold futures and options trading on Germany's Xetra-Gold exchange, "Interest for gold in Germany appears very much present," he says, pointing also to "relatively robust demand for investment bars in the past few days" even though the political climate is nowhere near "as tense" as it was during the Greek deficit crisis of April and May.

"National debt problems could this time also be part of the reason behind physical gold buying."

Following Monday's rumors of intervention by the Bank of Israel to weaken the Shekel, and Tuesday's fresh "quantitative easing" by the Bank of Japan, the Brazilian government today hiked the tax charged on foreign holdings of its bonds from 2% to 4%, in a bid to stem the Real's appreciation on the currency market.

Brasilia's finance minister, Guido Mantega, last week said we've entered an "international currency war" as countries compete for export-market share.

"A core group of major economies needs to agree urgently on a multilateral and coordinated package of policy measures...to avoid the damaging consequences of continued unilateral action," says Charles Dallara, head of the Institute for International Finance, in an open letter to the International Monetary Fund (IMF).

Ahead of this month's G20 meeting of advanced and fast-growing economy finance chiefs – and amid US accusations of "currency manipulation" – Chinese premier Wen Jiabao said last weekend that Beijing "has already bought and is holding Greek bonds...and will undertake a great effort to support Eurozone countries."

Analysis from Lombard Street Research economist Gabriel Stein notes that China's action helps buoy the Euro against the Dollar – thus making Chinese exports to the United States more competitive.

The gold price in Euros touched a two-week high in early trade on Wednesday, before slipping back from €31,365 per kilo.

British investors wanting to buy gold today saw the price hit its highest level since June 20th above £849 per ounce.

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

6 Critical Money Making Rules