Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Stock Market Dow Elliott Wave Analysis Forecast - Video - 16th Oct 19
$100 Silver Has Come And Gone - 16th Oct 19
Stock Market Roll Over Risk to New highs in S&P 500 - 16th Oct 19
10 Best Trading Schools and Courses for Students - 16th Oct 19
Dow Stock Market Short-term Trend Analysis - 15th Oct 19
The Many Aligning Signals in Gold - 15th Oct 19
Market Action Suggests Downside in Precious Metals - 15th Oct 19
US Major Stock Market Indexes Retest Critical Price Channel Resistance - 15th Oct 19
“Baghad Jerome” Powell Denies the Fed Is Using Financial Crisis Tools - 15th Oct 19
British Pound GBP Trend Analysis - 14th Oct 19
A Guide to Financing Your Next Car - 14th Oct 19
America's Ruling Class - Underestimating Them & Overestimating Us - 14th Oct 19
Stock Market Range Bound - 14th Oct 19
Gold, Silver Bonds - Inflation in the Offing? - 14th Oct 19
East-West Trade War: Never Take a Knife to a Gunfight - 14th Oct 19
Consider Precious Metals for Insurance First, Profit Second... - 14th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - 13th Oct 19
The Most Successful IPOs Have This One Thing in Common - 13th Oct 19
Precious Metals & Stock Market VIX Are Set To Launch Dramatically Higher - 13th Oct 19
Discovery Sport EGR Valve Gasket Problems - Land Rover Dealer Fix - 13th Oct 19
Stock Market US Presidential Cycle - Video - 12th Oct 19
Social Security Is Screwing Millennials - 12th Oct 19
Gold Gifts Traders With Another Rotation Below $1500 - 12th Oct 19
US Dollar Index Trend Analysis - 11th Oct 19
China Golden Week Sales Exceed Expectations - 11th Oct 19
Stock Market Short-term Consolidation Does Not change Secular Bullish Trend - 11th Oct 19
The Allure of Upswings in Silver Mining Stocks - 11th Oct 19
US Housing Market 2018-2019 and 2006-2007: Similarities & Differences - 11th Oct 19
Now Is the Time to Load Up on 5G Stocks - 11th Oct 19
Why the Law Can’t Protect Your Money - 11th Oct 19
Will Miami be the First U.S. Real Estate Bubble to Burst? - 11th Oct 19
How Online Casinos Maximise Profits - 11th Oct 19
3 Tips for Picking Junior Gold Stocks - 10th Oct 19
How Does Inflation Affect Exchange Rates? - 10th Oct 19
This Is the Best Time to Load Up on These 3 Value Stocks - 10th Oct 19
What Makes this Gold Market Rally Different From All Others - 10th Oct 19
Stock Market US Presidential Cycle - 9th Oct 19
The IPO Market Is Nowhere Near a Bubble - 9th Oct 19
US Stock Markets Trade Sideways – Waiting on News/Guidance  - 9th Oct 19
Amazon Selling Fake Hard Drives - 4tb WD Blue - How to Check Your Drive is Genuine  - 9th Oct 19
Whatever Happened to Philippines Debt Slavery?  - 9th Oct 19
Gold in the Negative Real Interest Rates Environment - 9th Oct 19
The Later United States Empire - 9th Oct 19
Gold It’s All About Real Interest Rates Not the US Dollar - 8th Oct 19
A Trump Impeachment Would Cause The Stock Market To Rally - 8th Oct 19
The Benefits of Applying for Online Loans - 8th Oct 19
Is There Life Left In Cannabis - 8th Oct 19
Yield Curve Inversion Current State - 7th Oct 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast Oct - Dec 2019 by Nadeem Walayat

Gold Recovers as Stock Markets Rally; Bond Prices "Simply Not in Line" with Inflation Fears

Commodities / Gold & Silver Oct 23, 2007 - 08:56 AM GMT

By: Adrian_Ash

Commodities SPOT GOLD PRICES rose all through the Asian and early London sessions on Tuesday, regaining $12 of Monday's $20 plunge to trade at $760 per ounce just ahead of the US open.

" Spot Gold has not been this high since 1980," notes Christopher Langguth of last week's closing level in his latest technical analysis for Mitsui.

"There is no resistance and the last objective is $875 [on Langguth's charts]. Whether or not it reaches the target remains to be seen but there is no weakness and no reason to sell now."

European stock markets also jumped early Tuesday – and bond prices slipped back – catching up with Monday's late action in New York and the stronger-than-forecast earnings reported overnight by tech-stock leader Apple Inc.

Wall Street futures pointed higher, with new earnings results due from Amazon, AT&T, DuPont, United Parcel Service (UPS) and Unisys.

Gold futures traded in Tokyo had earlier ended the session little changed. The Nikkei stock index also held flat after dropping 2.2% yesterday.

India's domestic Gold Market , meantime, saw spot prices rise by 0.4%, while the Sensex equity index in Mumbai put in its best one-day performance ever, shooting nearly 900 points higher to close within striking distance of a new all-time high.

"Marketmen said revival of buying by jewelry fabricators and local parties ahead of Diwali boosted the trading sentiment," reports LiveMint, the Wall Street Journal 's local service in Mumbai.

"They said a steep fall in previous day's trading also attracted local customers to buy at existing low levels."

Diwali, the Hindu festival of light, will take place on Nov. 10th. It traditionally spurs the heaviest demand for Gold Buying by consumers in Indian, the world's hungriest market for physical gold.

In Europe, the US and Japan, meantime, "a number of investors seem to be increasingly aware of [credit and US Dollar] issues," writes Nikos Kavalis in the latest monthly report from the GFMS consultancy in London.

Investors are also "gradually more skeptical of traditional investment and savings vehicles," he adds.

"After years of aggressive 'yield-hunting' and, arguably, credit risk under pricing, a move away from risky assets and into safe haven instruments is beginning to gather momentum."

Kavalis now reckons the Gold Price will average $700 per ounce or more in the second half of 2007. BMO Capital Markets in the United States today raised its 2008 and 2009 forecasts to $800 per ounce, increasing its silver and platinum targets alongside since "other precious metals prices cluster around the broad trends set out by gold."

At the London Metal Exchange today, copper prices bounced from a one-month low, leading a rally in all base-metal prices. Wheat, corn and soybeans also rose on the world futures market, while crude oil prices snapped a three-day losing run to break above $86.50 per barrel.

On the currency market, the Euro reversed the sudden fall seen vs. the US Dollar on Monday, breaking back above $1.4270 by lunchtime in Frankfurt.

The British Pound also rallied, gaining nearly 2.5¢ from Monday's low to breach $2.0500 for only the third time ever since 1981. For Sterling investors wanting to Buy Gold Today , that capped the price below £371 per ounce.

Gold Priced in British Pounds reached an all-time high above £380 per ounce in May 2006.

"Inflation is back on everyone's lips," says Peter Schaffrik at Dresdner Kleinwort in Frankfurt, one of 32 banks set to bid for inflation-linked German government bonds tomorrow.

Wednesday's auction will see the debut of 5-year inflation-linked Bunds, tied to the official rate of Eurozone inflation. It rose to a 12-month high of 2.1% per year in Sept.

"Bonds have gained far too much given the inflation outlook being communicated by the European Central Bank," agrees Michael Markovic at Credit Suisse in Zurich.

"Inflation fears are simply not in line with the bond market rally we saw in the last few days."

By Adrian Ash

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 , 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 - 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