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
UK EU Election Results, Brexit Party Victory, Labour and Tory Bloodbath, UKIP and ChangeUK Die - 27th May 19
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 Recovers $1400, "Support Strengthened" as Japan Crisis Worsens

Commodities / Gold and Silver 2011 Mar 16, 2011 - 10:13 AM GMT

By: Adrian_Ash

Commodities

THE PRICE OF GOLD rose in London trade on Wednesday to regain $1400 per ounce as a rally in Japanese shares failed to prevent further losses in global stock markets.

With 450,000 people now homeless in freezing conditions, technicians at the stricken Fukushima nuclear plant were forced to abandon their work by a jump in radiation levels. 150 miles away, Russia joined France in moving to evacuate its embassy staff.


Developed-world government bonds rose, pushing long-term interest rates down to fresh 2011 lows, but debt auctions by Russia and Poland both failed to raise more than  50% of the money sought.

Silver prices tracked gold's recovery, briefly touching $34.80 per ounce – a new 31-year high when first reached two weeks ago.

"We saw very good buying below $1390 from the physical market" says Swiss refiner MKS's finance division  in a note on Tuesday's 3.1% drop in the gold price.

"It would appear that investors consider yesterday's sell-off as overdone," agrees South Africa's Standard Bank.

Now "cautiously re-entering the precious metals market," this gold investing – "together with a weaker Dollar and some interest from the physical market, could see some upside for gold and silver."

Crude oil prices meantime rallied fast as forces in Saudi-neighbor Bahrain opened fire on pro-democracy protesters, and pro-Gaddafi forces in Libya attacked the rebel-held stronghold of Benghazi.

The Bank of Japan again pumped cash into Tokyo's money market, taking the 3-day total above $700 billion, while in a rare televised appearance, Japanese emperor Akihito said he is "deeply worried" by the country's nuclear crisis.

Uranium prices have dropped nearly 10% over the last week. World No.2 mining producer Cameco – already down 15% from Feb.'s 27-month peak – has shed another 14%.

Japan is the world's third largest nuclear power generator. World No.2 France today called for an emergency G7 finance teleconference to discuss "systemic risk".

"[The crisis] is affecting how people in the US are thinking about their fledgling nuclear expansion," says Doug Davis at the $425 million Toronto money manager Davis- Rea Ltd., speaking to the Wall Street Journal.

"Who are you going to sell your uranium to if the Americans don’t expand nuclear power plants and the Japanese don't need it for a while?"

Over in the gold mining sector on Wednesday, a number of smaller producers reported  sharply higher operating margins for the end of 2010, thanks to "higher realized prices" as the metal broke then-all-time highs above $1400 per ounce in Nov. and Dec.

"This is a bubble and a fear trade," reckons Yogi Dewan, CEO of $640 million family-office asset manager Hassium in London, speaking to CNBC today.

"As soon as the recovery takes hold and the interest-rate cycle changes you will see mass outflows from gold into riskier assets."

A raft of new US data today defied analyst forecasts with a surprise outflow of $113 billion on the nation's fourth-quarter Current Account, plus fewer-than-expected new housing starts and building permits.

Raw material costs for US factories 1.6% last month from Jan., the fastest month-on-month pace since the post-deflation rebound of 2009.

"The problem [with the gold price rally] is I think it may be well sold into," says a London trader quoted by Dow Jones Newswires.

"Serious damage was done [to gold's technical picture on Tuesday] and although longer term, we are still in a bull market, short-term the uptrend is broken."

"Silver also had a technically bearish day," says Russell Browne at bullion market-maker Scotia Mocatta, "however the chart continues to be more encouraging than gold's.

Support for the silver price now "lies at late February congestion of $32.15," says Scotia. In gold, yesterday's drop "only found [support] at the 100-day moving average of $1379.

But "after [that] test, this level has strengthened and gold will now require a significant catalyst to break below here."

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 2011

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