Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
The Three M's of Hyperinflation : Milosevic, Mugabe, And Maduro - 26th May 19
Global Multi-Market / Asset Charts Review - 26th May 19
An Oil Shock Could Be the Black Swan That Finally Drives Gold Higher - 26th May 19
Brexit Party Forces Theresa May to Resign, Boris Johnson Next Tory Prime Minister? - 26th May 19
IBM - Investing in AI Machine Intelligence Stocks - 25th May 19
Seasonal Dysfunction: Why Generations of Gold and Silver Investors Are Having Such Difficulty - 25th May 19
Employment - The Good and the Bad of Job Automation - 25th May 19
Gold Mining Mid-Tier Stocks Fundamentals - 25th May 19
Buy This Pick-and-Shovel 5G Stock Before It Takes Off - 25th May 19
China Hang Seng Stocks Index Collapses and Commodities - 24th May 19
Costco Corp. (COST): Finding Opportunity in Five Minutes or Less - 24th May 19
How Free Bets Have Impacted the Online Casino Industry - 24th May 19
This Ultimate Formula Will Help You Avoid Dividend Cutting Stocks - 24th May 19
Benefits of a Lottery Online Account - 24th May 19
Technical Analyst: Gold Price Weakness Should Be Short Term - 24th May 19
Silver Price Looking Weaker than Gold - 24th May 19
Nigel Farage's Brexit Party EU Elections Seats Results Forecast - 24th May 19
Powerful Signal from Gold GDX - 24th May 19
Eye Opening Currency Charts – Why Precious Metals Are Falling - 23rd May 19
Netflix Has 175 Days Left to Pull Off a Miracle… or It’s All Over - 23rd May 19
Capitalism Works, Ravenous Capitalism Doesn’t - 23rd May 19
The Euro Is Bidding Its Time: A Reversal at Hand? - 23rd May 19
Gold Demand Rose 7% in Q1 2019. A Launching Pad Higher for Gold? - 23rd May 19
Global Economic Tensions Translate Into Oil Price Volatility - 22nd May 19
The Coming Pension Crisis Is So Big That It’s a Problem for Everyone - 22nd May 19
Crude Oil, Hot Stocks, and Currencies – Markets III - 22nd May 19
The No.1 Energy Stock for 2019 - 22nd May 19
Brexit Party and Lib-Dems Pull Further Away from Labour and Tories in Latest Opinion Polls - 22nd May 19
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
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

Market Oracle FREE Newsletter

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

Gold & Oil Rise for Fourth Day as Stocks Drop on "Carry Trade" Panic, Threat of Turkish Action in Iraq

Commodities / Gold & Silver Oct 16, 2007 - 08:51 AM GMT

By: Adrian_Ash

Commodities SPOT GOLD PRICES hit a new 27-year high for the fourth session running early on Tuesday, breaking above $767 per ounce just ahead of the London open before slipping back to $760 – the level of last night's close – by midday.


The move in Dollar Gold Prices came even as the US Dollar rose against the Euro. The Japanese Yen rose faster still, gaining more than 1% versus the single currency inside 60 minutes to hit a one-week high.

Asian and European stock markets fell hard, meantime, knocking 1.3% off the Nikkei in Tokyo and taking Europe 's top 300 shares nearly 0.9% lower on average.

Credit-default swaps, the insurance contracts that bond investors bid up when they believe the risk of non-payment is rising, jumped higher in Europe . The cost of buying a CDS on debt issued by Nokia, the Swedish telecoms giant, rose by nearly one-half after it reported a 36% drop in quarterly earnings today.

Amid this sudden "flight from risk" – last seen when global credit markets froze in early August – crude oil prices rose together with the Gold Market for the fourth session running, touching fresh record highs above $87.90 per barrel of WTI, the benchmark US fuel.

"It is difficult to find any bearish factors now," reckons Tetsu Emori, a fund manager at Astmax Futures in Tokyo .

"There's the Iraq-Turkey issue, a weak Dollar, and inventory levels for US heating oil are much lower than a year ago."

In Ankara this morning, "I sincerely wish that this motion will never be applied," said the Turkish prime minister Tayyip Erdogan after asking parliament for permission to send troops across the Iraqi border in pursuit of some 3,000 Kurdish rebels.

"We will act at the right time and under the right conditions," he added. The motion will be debated on Wednesday. Baghdad today called for "urgent talks" to forestall the action.

Back in the markets, the high-yielding Aussie and New Zealand Dollars sank by 200 point against the Yen in a matter of minutes as forex traders frantically unwound their "carry trade" positions.

Wheat futures fell for the third day running, and the base metals all slipped back, led by copper and zinc. Lead fell sharply from Monday's new all-time high.

Gold Priced in Euros shot to €540 per ounce before slipping back towards last night's close at €535. For British investors wanting to Buy Gold Today , the metal also hit a new 17-month high, trading above £376 per ounce – within 1.2% of the all-time top recorded in May 2006.

On the economic front, official data reported in the UK showed a slight drop to 1.8% in consumer-price inflation during Sept., down from Aug.'s figure and below the Bank of England's target at 2.0%.

Germany 's CPI data, on the other hand, showed the highest year-on-year rate of change for 24 months at 2.4% in Sept. The much-watched ZEW confidence report, meantime, sank to -18.1 for this month, beating forecasts of a slump in economic expectations to -22.0.

On Wall Street, US stock futures pointed down ahead of the open – when Intel, Yahoo and IBM will lead the day's flood of third-quarter results – following comments overnight from Ben Bernanke, head of the Federal Reserve, that tried to warn of both inflationary risks and an economic slowdown ahead.

"The further contraction in housing is likely to be a significant drag on growth in the current quarter and through early next year," Bernanke told the Economic Club of New York.

Claiming that he would reverse the Fed's shock 0.5% cut to US interest rates if the economic data warranted it, Bernanke then said the Federal Reserve "will act as needed to support efficient market functioning and to foster sustainable economic growth and price stability."

This clear promise of further rate-cuts-to-come pushed US Treasury bond prices higher, taking 10-year yields below 4.65%.

US data due today includes Capacity Utilization and Industrial Production for Sept. plus

the NAHB Housing Market Index and ABC Consumer Confidence stats for Oct. – all expected to show a decline.

Net inflows of foreign investment cash into US securities, however, are forecast to show an increase for Aug. following July's surprise jump.

By Adrian Ash
BullionVault.com

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
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 2007

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.

Adrian Ash 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