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
This Dividend Aristocrat Is Leading the 5G Revolution - 22nd July 19
What the World Doesn’t Need Now is Lower Interest Rates - 22nd July 19
My Biggest 'Fear' For Silver - 22nd July 19
Reasons to Buy Pre-Owned Luxury Car from a Certified Dealer - 22nd July 19
Stock Market Increasing Technical Weakness - 22nd July 19
What Could The Next Gold Rally Look Like? - 22nd July 19
Stock Markets Setting Up For A Volatility Explosion – Are You Ready? - 22nd July 19
Anatomy of an Impulse Move in Gold and Silver Precious Metals - 22nd July 19
What you Really need to Know about the Stock Market - 22nd July 19
Has Next UK Financial Crisis Just Started? Bank Accounts Being Frozen - 21st July 19
Silver to Continue Lagging Gold, Will Struggle to Overcome $17 - 21st July 19
What’s With all the Weird Weather?  - 21st July 19
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Gold Holds Steady as World Stock Markets Drop on New Credit Woes; British Pound Falls After Weak Data

Commodities / Gold & Silver Nov 05, 2007 - 08:14 AM GMT

By: Adrian_Ash

Commodities SPOT GOLD PRICES ticked lower but held above $801.50 per ounce in Asian trade on Monday, spiking higher in London as world stock markets continued to sell off.


"I'm telling people this is the place to take money off the table and look to rebuy on a pullback," says Robin Wilkin at J.P.Morgan in London .

"Gold is still struggling on the upside after the strong rally and with big resistance just overhead," agrees Phil Smith for Reuters India.

"Support kicks in at $770 to the downside and overhead the very big level is $835 which is the 1980 high," Smith believes.

Gold futures traded at the Tocom in Tokyo today rose 1.6%, playing catch-up with Friday's dramatic $18 gain in the US session. The Nikkei stock index, meantime, dropped by the same proportion.

Financial stocks in the Asia-Pacific region fell nearly 2% after the world's biggest bank – Citigroup – lost its CEO, Chuck Prince, yesterday.

Citigroup now says it may need to write-down a further $11 billion on mortgage-related investments after admitting to a $6.5 billion write-down for the July to Sept. period.

In Hong Kong the Hang Seng index sank by 5%, closing nearly 10% below last Tuesday's new all-time record high. The Hang Seng had previously risen by one-half since the start of April.

European stocks opened the week sharply lower, dropping 0.6% in early trade. Here in London , shares in the UK 's second-largest grocery chain, Sainsbury's, dumped one-fifth of their value this morning after an investment fund backed by the government of Qatar walked away from bidding for the supermarket, citing "credit market turbulence".

The Qatar Investment Authority was asked last week to inject an extra £500 million ($1bn) to cover a "potential" shortfall in Sainsbury's pension fund.

"I am sure gold will reach $850 by the end of this year," reckons Yukuji Sonoda at Daiichi Commodities in Tokyo . "Every government is very anxious about the Dollar [and] this will automatically support the Gold Price . There's a strong intention from the Chinese government to sell the Dollar."

"If there's more money flowing into gold, maybe we can even see gold at $900 by the end of this year," says Ronald Leung of Lee Cheong Gold Dealers in Hong Kong , talking to Reuters today.

In India – where the Diwali festival of lights this coming Friday will mark an auspicious time for gold buying on the Hindu calendar – Gold Prices in jewelry shops this weekend reached 10,310 Rupees per 10 grams, an 18-month high according to D.D.News.

" Gold Prices are already more than Rs 1,300 higher than the last Diwali levels," says the newswire. "Besides festival demand, a sharp surge in international prices has also added to the rally in the domestic [Indian gold] markets."

Meantime on the currency markets, the US Dollar crept higher vs. the Euro overnight, bouncing half-a-cent from last Friday's new all-time low.

The British Pound, meanwhile, sank nearly 1¢ from last week's quarter-century highs on news that UK industrial output shrank in the year to Sept. Sterling then dropped to $2.0805 after the PMI of confidence in the services sector fell to 53.1 points in Oct., well below expectations and down from Sept.'s reading of 56.7.

That move on the currency markets pushed the Gold Price in British Pounds back up to last week's closing level, just shy of a new all-time high above £386 per ounce. For Eurozone investors wanting to Buy Gold Today , the price rallied 0.4% from a dip to €553 per ounce.

Over in the energy markets, US crude oil dropped 1.4% overnight to $94.61 per barrel after Kurdish rebels in northern Iraq freed eight Turkish soldiers. PetroChina, newly listed on the Shanghai stock exchange today, meantime bucked the sell-off in world equities to gain more than 160% on its debut.

Now larger than the entire Russian stock market, PetroChina became the world's biggest company by market value at $1 trillion.

But the surging price of oil threatens to push the cost of living sharply higher, according to Alan Greenspan, former head of the US Federal Reserve. "The United States is tremendously vulnerable to oil price shocks," agrees Herb Kelleher, chairman of Southwest Airlines.

"We're headed for a crisis insofar as our consumption of energy is concerned."

"Just since August," says a statement from American Airlines, "average spot market crude oil prices have risen by nearly $14 a barrel. That increase translates into more than $1 billion of additional annual expense for American."

Rising oil prices are also denting profit potential in the gold mining sector. Newmont Mining, the world's second-largest producer, said last week that earnings-per-share doubled between July and Sept. from the same period in 2006. But it raised its cost-per-ounce forecast from $400 to $430.

Oil accounts for 12% of Newmont's costs said CEO Richard O'Brien last week. Newmont's stock has risen by 15% so far this year.

The spot Gold Price , meantime, has risen by 25%.

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