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
British Pound GBP vs Brexit Chaos Timeline - 14th Sep 19
Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - 14th Sep 19
War Gaming the US-China Trade War - 14th Sep 19
Buying a Budgie, Parakeet for the First Time from a Pet Shop - Jollyes UK - 14th Sep 19
Crude Oil Price Setting Up For A Downside Price Rotation - 13th Sep 19
A “Looming” Recession Is a Gold Golden Opportunity - 13th Sep 19
Is 2019 Similar to 2007? What Does It Mean For Gold? - 13th Sep 19
How Did the Philippines Establish Itself as a World Leader in Call Centre Outsourcing? - 13th Sep 19
UK General Election Forecast 2019 - Betting Market Odds - 13th Sep 19
Energy Sector Reaches Key Low Point – Start Looking For The Next Move - 13th Sep 19
Weakening Shale Productivity "VERY Bullish" For Oil Prices - 13th Sep 19
Stock Market Dow to 38,000 by 2022 - 13th Sep 19 - readtheticker
Gold under NIRP? | Negative Interest Rates vs Bullion - 12th Sep 19
Land Rover Discovery Sport Brake Pads and Discs's Replace, Dealer Check and Cost - 12th Sep 19
Stock Market Crash Black Swan Event Set Up Sept 12th? - 12th Sep 19
Increased Pension Liabilities During the Coming Stock Market Crash - 12th Sep 19
Gold at Support: the Upcoming Move - 12th Sep 19
Precious Metals, US Dollar, Stocks – How It All Relates – Part II - 12th Sep 19
Boris Johnson's "Do or Die, Dead in a Ditch" Brexit Strategy - 11th Sep 19
Precious Metals, US Dollar: How It All Relates – Part I - 11th Sep 19
Bank of England’s Carney Delivers Dollar Shocker at Jackson Hole meeting - 11th Sep 19
Gold and Silver Wounded Animals, Indeed - 11th Sep 19
Boris Johnson a Crippled Prime Minister - 11th Sep 19
Gold Significant Correction Has Started - 11th Sep 19
Reasons To Follow Experienced Traders In Automated Trading - 11th Sep 19
Silver's Sharp Reaction Back - 11th Sep 19
2020 Will Be the Most Volatile Market Year in History - 11th Sep 19
Westminister BrExit Extreme Chaos Puts Britain into a Pre-Civil War State - 10th Sep 19
Gold to Correct as Stocks Rally - 10th Sep 19
Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - 10th Sep 19
Stock Market Sector Rotation Giving Mixed Signals About The Future - 10th Sep 19
The Online Gaming Industry is Going Up - 10th Sep 19
The Unknown Tech Stock Transforming The Internet - 10th Sep 19
More Wall Street Propaganda - 10th Sep 19
Stock Market Price Structure Still Suggests We Are Within Volatile Rotation - 9th Sep 19
Stock Market Still Treading Water - 9th Sep 19
Buying Pullbacks in Silver & Gold - 9th Sep 19
Government Spending - The High Price of a "Free Lunch" - 9th Sep 19
Don't Worry About a Recession - 9th Sep 19
Large Drop in Stocks, Big Rally in Gold and Silver - 9th Sep 19
US Stock Market Hasn’t Cleared The Storm Yet - 8th Sep 19
Precious Metals Were Ripe for a Pullback - 8th Sep 19
Market Chart Patterns to Spot High-Confidence Trading Opportunities in a "Pinch"! - 8th Sep 19
Five Feet High And Rising - Stock Market Bulls False Sense of Security - 8th Sep 19

Market Oracle FREE Newsletter

The No1 Tech Stock for 2019

Gold's 2011 Bullish Outlook as US at Risk of Joining Eurozone in Debt Crisis

Commodities / Gold and Silver 2011 Dec 21, 2010 - 07:19 AM GMT

By: GoldCore

Commodities

Best Financial Markets Analysis ArticleGold is up slightly after yesterday's 0.5% gain and appears to be consolidating just below $1400/oz. Gold is being supported by growing energy and food inflation and continued sovereign debt concerns. Recent days have seen the cost of insuring French debt rise to record levels and France's AAA rating is now at risk due to the spreading Eurozone debt contagion. Nor is the US immune to the debt crisis as many US cities are at risk of defaulting in 2011 (see news below). Gold may be anticipating problems in this regard in 2011 - as it has done in recent years.


Gold is currently trading at $1,386.25/oz, €1,053.70/oz and £894.53/oz.

Gold Inflation Adjusted Index - 40 Year (Quarterly)


The 'Bloomberg Composite Gold Inflation Adjusted Spot Price' is derived from the monthly US Urban consumers price index

Commodity prices have surged to record nominal highs in recent days and oil continues to consolidate near the $90 a barrel mark (NYMEX $89.68 and BRENT $92.92). It is important to realise that while most commodities are at record nominal highs, they remain well below their inflation adjusted highs seen over 30 years ago during the stagflation of the 1970s.

Despite gold's 27% increase so far in 2010, it remains 35% below its inflation adjusted high of January 1980 which was $2,300/oz (using US CPI). Bloomberg's Composite Gold Inflation Adjusted Spot Price Chart shows gold below its quarterly inflation adjusted high (CPI-U) - see chart above.

Continuing weakness in the Baltic Dry Index (see chart below) is a cause of concern and suggests that the global economic recovery remains fragile and economic growth may come under pressure in the coming months.

Baltic Dry Index - 5 Years (Daily)

ETF gold or gold in exchange-traded products, or ETPs, reached a record 2,114.6 metric tonnes as of yesterday (see chart below). Holdings gained 18 percent this year as fiat currencies have come under pressure. The majority of the gains took place between March and July and there has been consolidation in recent months. While the holdings sound very large in tonnage terms - in dollar terms they remain very small when compared to the massive capital flows seen in equity, bond, currency and derivative markets.

ETF Gold Holdings - 1 Year (Daily)

SILVER
Silver is currently trading $29.30/oz, €22.27/oz and £18.91/oz.

PLATINUM GROUP METALS
Platinum is currently trading at $1,709.25, palladium at $747.00/oz and rhodium at $2,225/oz.

NEWS
(The Guardian) -- $2tn debt crisis threatens to bring down 100 US cities
Overdrawn American cities could face financial collapse in 2011, defaulting on hundreds of billions of dollars of borrowings and derailing the US economic recovery. Nor are European cities safe - Florence, Barcelona, Madrid, Venice: all are in trouble

(Financial Times) -- Sugar and coffee hit multi-year highs
Sugar and coffee prices hit multi-year highs on Monday, further boosting food inflation concerns as supply problems mounted after a string of lower-than-expected harvests due to unfavourable weather, analysts said. The surge in sugar and coffee prices comes as other agricultural commodities - from corn and wheat to soyabean and barley - trade near a two-year high. The European Union has delayed a decision about allowing further export licences, with officials in Brussels saying the priority is to supply the internal market. Last week, Portugal ran out of sugar briefly, the first European country to suffer a sugar shortage in at least 30 years.

(Bloomberg) -- Cotton Surges by Exchange Limit to Record on Supply Shortfall
Cotton futures in New York jumped to a record, gaining by the daily limit for a second day, on speculation that global demand led by China will surpass supply.

(Bloomberg) -- Rubber Climbs to Record on Tire Demand, Production Disruptions
Rubber futures climbed to a record on speculation that a global shortage will worsen as tire demand increases and wet weather hurts supplies from producers including Thailand, the biggest grower. The cash price also surged to an all-time high.

(Bloomberg) -- Euro Rises as China Says Taken 'Concrete Action' to Help Europe
The euro rose, ending a two-day decline, after Chinese Vice Premier Wang Qishan said the nation had taken "concrete action" to help the European Union with its debt problems.

(Bloomberg) -- Uranium prices have risen about 20 percent since October because of a limited supply of the nuclear fuel being available to utilities, producers and traders on the spot market, according to data provided by Ux Consulting Co. Uranium oxide concentrate for immediate delivery reached $62.50 a pound in the week through to yesterday, the Roswell, Georgia-based UxC said in a report. That compares with $52 a pound in the week through Oct. 25.

(Telegraph) -- Pimco says 'untenable' policies will lead to eurozone break-up
Pimco, the world's largest bond fund, has called on Greece, Ireland and Portugal to step outside the eurozone temporarily and restructure their debts unless the currency bloc agrees to a radical change of course.

This update can be found on the GoldCore blog here.

Mark O'Byrne
Director

IRL
63
FITZWILLIAM SQUARE
DUBLIN 2

E info@goldcore.com

UK
NO. 1 CORNHILL
LONDON 2
EC3V 3ND

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

W www.goldcore.com

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

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: Past experience is not necessarily a guide to future performance. 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. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore 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