Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21
Gold Price Big Picture Trend Forecast 2021 - 13th Jan 21
Are Covid Lockdowns Bullish or Bearish for Stocks? FTSE 100 in Focus - 13th Jan 21
CONgress "Insurrection" Is Just the Latest False Flag Event from the Globalists - 13th Jan 21
Reflation Trade Heating Up - 13th Jan 21
The Most Important Oil Find Of The Next Decade Could Be Here - 13th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold and Silver Tumble From Bull Market Highs on Rising Interest Rates

Commodities / Gold and Silver 2010 Dec 08, 2010 - 07:58 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD continued to fall in Asia and London on Wednesday, dropping 2.8% from Tuesday's new record high of $1430 per ounce as commodity markets also fell and global stock markets stalled.

Crude oil slipped further from yesterday's new two-year highs, but major-economy government bonds also extended their losses, driving 10-year US Treasury yields above 3.20% even as the US Dollar rallied sharply on the forex market.


Spot-market silver bullion prices lost more than 7% from yesterday's new 30-year high above $30.70 per ounce.

The gold price in Euros unwound the last of Monday's 1.9% surge to new record highs, trading back at last week's finish beneath €33,900 per kilo, while the single currency dipped below $1.32 on the forex market.

“Investors [in base metals] are clearly taking profits after the latest high-altitude flight,” reckons Commerzbank's commodities team.

“Liquidity is drying up before year-end, so even the most buoyant of asset classes, such as gold bullion, are affected,” says Jamie Spiteri, head of trading at Sydney's Shaw Stockbroking.

“Some investors who have sold their gold are buying back,” a Hong Kong dealer told Reuters on Wednesday.

“We don't see many people selling scrap gold.”

Scheduled to sell €5 billion in new government debt today, Berlin saw the yield on 10-year German Bunds rise to a 7-month high above 3.00% this morning.

Irish 10-year bond yields held steady above 8%, as the Dublin government won the first vote on its austerity budget announced Tuesday – needed to secure €85bn of emergency finance from Ireland's EU partners and the Washington-based IMF amid what finance minister Lenihan calls the “worst crisis in our history.”

Ten-year UK gilts also fell again in price, pushing their yield to new buyers above 3.50% for the first time since June.

US Treasury bonds fell further too, as the tax-cut and jobless benefit extensions agreed by President Obama and Republican lawmakers late Monday night were estimated at “between $700 billion and $800 billion if ultimately signed into law” according to CNN Money.

“[Coming as] Obama’s deficit panel is trying to find ways to cut the $1.3trn budget deficit, [this] encourages the view that the Administration and Congress are not really interested in reducing the deficit,” says Steven Barrow, chief currency strategist at Standard Bank.

“The Eurozone seems to be in a very different place with its over-zealous deficit-reduction ambitions. [But] one cost of this...is the prospect of haircuts on future debt as policymakers try to shift the burden [of repayments] away from taxpayers.”

Back in the gold bullion market, “Record highs gave way to massive liquidation on Tuesday,” notes a London precious metals desk today, “as New York turned a seller of bonds and commodities.”
The jump in 10-year US Treasury yields to 3.00% and above “was a good enough reason to liquidate positions heading into year end and the selling momentum [in gold bullion] was massive.”

Ten-year US Treasury bond yields today rose 3.25%, their highest level since June.

“After years of conveniently ignoring the issue and instead focusing efforts on pulverizing the Euro area, there appears to be a realization that the US has a massive Federal debt problem,” says Marc Ostwald at Monument Securities in London.

Calling the Eurozone debt crisis a “work in progress”, Ostwald believes that “A test of the 30-year downtrend [in US bond yields and thus interest rates] looks likely to be broken, and a run up to test 5.0% [on the 10-year] will mark the start of a long-term bear trend [in bond prices]...not only in the USA but around most of the G7 and Eurozone.”

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