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
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
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20
Gold Mining Stocks Fundamentals - 18th May 20
Why the Largest Cyberattack in History Will Happen Within Six Months - 18th May 20
New AMD Ryzen 4900x and 4950x Zen3 4th Gen Processors Clock Speed and Cores Specs - 18th May 20
Learn How to Play the Violin, Kids Activities and Learning During Lockdown - 18th May 20
The Great Economy Reopening Gamble - 17th May 20
Powell Sends a Message With Love for Gold - 17th May 20
An Economic Renaissance Emerges – Stock Market Look Out Below - 17th May 20
Learn more about the UK Casino Self-exclusion - 17th May 20
Will Stocks Lead the Way Lower for Gold Miners? - 15th May 20
Are Small-Cap Stocks (Russell 2k) Headed For A Double Dip? - 15th May 20
Coronavirus Will Wipe Out These Three Industries for Good - 15th May 20
Gold and Silver: As We Go from Deflation to Hyperinflation - 15th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Gold Consolidating and Expected to Resume Uptrend

Commodities / Gold & Silver Oct 04, 2007 - 08:55 AM GMT

By: Gold_Investments

Commodities Gold
Gold was flat yesterday and was up 20 cent from $729.70 to $729.90.
It traded slightly down in the New York Access market and has traded sideways in Asian and early European trading. At 1200 GMT gold was trading at $727.40


If short term support at $724 is breached to the downside, there is a possibility of gold consolidating at lower levels. Strong support and robust physical demand is seen at previous resistance at $690 to $700 and the 50 day moving average at $693. However, in a bull market much anticipated corrections sometimes do not materialise and given the very strong fundamentals the gold market could continue moving higher.

The fallacy that gold's bull market is purely a function of dollar weakness is seen in the table below.

One of the best indicators that gold is again in a multi year secular bull market is seen in the fact that gold prices are rising in all fiat currencies internationally (http://www.gold.org/value/stats/statistics/prices/index.html). Or to put it more accurately, the value of major currencies is falling in terms of the universal finite currency that is gold. This is no surprise as money supply growth of 10% plus in most major economies is very inflationary. Conversely, the global supply of gold is relatively flat at some 1.5% per annum. Basic supply and demand economics means that it is extremely likely that gold will become more valuable in terms of paper currencies in the coming years.

Alan Greenspan warned in London yesterday that a long period of low prices and stable growth is coming to an end and central banks today have to pay more attention to inflation pressures. "We're beginning to see this extraordinary period of disinflation and economic growth is coming to a halt," . . . "We now have to be very sensitive to the fact that inflationary pressures could well get out of hand."

Today in the FT, Ajay Kapur writes that "In a world of fiat currency, central bankers can increase the supply of money at the stroke of a pen. Fiat currencies are not backed by gold, or any other asset, just the good faith users place in the government and its printing press. So these are really “faith-based” currencies, prevalent almost everywhere today."

Alan Greenspan himself told a Senate Banking Committee in May, 1999, "Gold still represents the ultimate form of payment in the world. . . . Fiat money, in extremis, is accepted by nobody. Gold is always accepted."

Worryingly, his loose money successor, Ben Bernanke, said in a speech in November 2002, 'Deflation: Making sure 'It doesn't happen here' , that "Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology called a printing press , that allows us to print as many dollars as it wishes at essentially no cost". Those who truly understand and worry about the insidious danger inflation poses to our economies are no longer calling Bernanke, 'Helicopter Ben' rather his recent actions have resulted in him being upgraded to 'B52 Ben' or 'Weimar Ben'.

With money supply expanding hugely internationally and the printing presses running overtime in order to ease the global credit crisis, gold will once again become the asset class of choice of investors internationally seeking to protect themselves from the global fiat currency debasement which is taking place and accelerating.

A reminder of the difficult and dangerous nature of the mining industry and risks faced by miners, their employers and investors in the sector was seen in the terrible mining accident in South Africa. The Times of London reports that more than 3,000 miners were trapped a mile and a half underground in a South African goldmine after the lift shaft was shattered by falling equipment. Rescuers were last night frantically trying to free the workers at Elandsrand mine, at Carletonville, west of Johannesburg, amid fears that air at the bottom of the shaft was running out. The miners' union said that 3,200 workers had already spent a day in a cramped underground space where temperatures could reach 40C (104F). “We are very worried because . . . they might be suffocating,” said Lesiba Seshoka, a union spokesman. Amelia Soares, of the Harmony Gold Mining Company, South Africa's third biggest gold mining outfit, said that nobody had been injured, but admitted that the miners faced a critical period while a complicated rescue was being organised.

Harmony's share price fell 5%. As gold production internationally appears to have peaked or will soon peak, mining companies are having to go deeper and deeper to mine gold and this creates much risk to gold miners.

Forex and Gold
The USD has continued to rally and has rallied back to 1.4128 and 2.0335 against the EUR and GBP respectively.

News that the Vietnamese central bank and Qatari sovereign wealth fund are diversifying out of U.S. Treasuries and USD denominated assets show that the dollar's recent reprieve is just that and it will continue to weaken significantly in the coming months.

The Telegraph reports that "Vietnam, which has mid-sized reserves of $40bn, is seen as weather vane for the bigger Asian powers. Together they hold $3,575bn of foreign reserves, over 65% of the world's total. China leads with $1,340bn, but South Korea, Taiwan, Singapore, and even Thailand all built up massive holdings. The concern is that once one or two members of the region jump ship, it could set off a broader scramble. None of them want to be the last one left holding a devalued asset. Vietnam's central bank said this week that it would move "gradually" to a floating currency.

Separately, the gas-rich Gulf state of Qatar announced that it had cut the dollar holdings of its $50bn sovereign wealth fund from 99% to 40%, switching into investments in China, Japan, and emerging Asia.

The move is intended to increase long-term returns for future generations, but it can easily be seen as a vote of no confidence in US economic management.

The drastic shift by the Qatar Investment Authority is a warning that petro-dollar powers with some $3,500bn under management may pull the plug on the heavily endebted U.S. economy -- which needs to suck in the majority of the world's savings just to stay afloat."
(The Telegraph: Dollar's double blow from Vietnam and Qatar - http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/10/03/bcnviet103.xml)

Silver
Spot silver was trading at $13.22/13.24 (1200 GMT).

PGMs
Platinum was trading at $1354/1360 (1200 GMT).
Spot palladium was trading at $358/363 an ounce (1200 GMT).

Oil
Oil prices fell Thursday in Asia after an unexpected increase in U.S. crude oil inventories.
Light, sweet crude for November delivery fell 13 cents to $79.81 a barrel in Asian electronic trading on the New York Mercantile Exchange by late afternoon in Singapore. The Nymex crude contract fell 11 cents to settle at $79.94 a barrel.

Gold Investments
63 Fitzwilliam Square
Dublin 2
Ireland
Ph +353 1 6325010
Fax  +353 1 6619664
Email info@gold.ie
Web www.gold.ie
Gold Investments
Tower 42, Level 7
25 Old Broad Street
London
EC2N 1HN
United Kingdom
Ph +44 (0) 207 0604653
Fax +44 (0) 207 8770708
Email info@goldinvestments.org
Web www.goldinvestments.org

Mission Statement
Gold and Silver Investments Limited hope to inform our clientele of important financial and economic developments and thus help our clientele and prospective clientele understand our rapidly changing global economy and the implications for their livelihoods and wealth.
We focus on the medium and long term global macroeconomic trends and how they pertain to the precious metal markets and our clienteles savings, investments and livelihoods. We emphasise prudence, safety and security as they are of paramount importance in the preservation of wealth.

Financial Regulation: Gold & Silver Investments Limited trading as Gold Investments is regulated by the Financial Regulator as a multi-agency intermediary. Our Financial Regulator Reference Number is 39656. Gold Investments is registered in the Companies Registration Office under Company number 377252 . Registered for VAT under number 6397252A . Codes of Conduct are imposed by the Financial Regulator and can be accessed at www.financialregulator.ie or from the Financial Regulator at PO Box 9138, College Green, Dublin 2, Ireland. Property, Commodities and Precious Metals are not regulated by the Financial Regulator

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. Past experience is not necessarily a guide to future performance.

All the opinions expressed herein are solely those of Gold & Silver Investments Limited and not those of the Perth Mint. They do not reflect the views of the Perth Mint and the Perth Mint accepts no legal liability or responsibility for any claims made or opinions expressed herein.

Fair Use Notice: This newsletter contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of financial and economic significance. At all times we credit and attribute the copywrite owner and publication.
We believe this constitutes a 'fair use' of any such copyrighted material as provided for in Copyright Law. The material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for economic research purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.

Gold Investments Archive

© 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