Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
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
It’s Not Technology but the Fed That Is Taking Away Jobs - 16th May 19
Learn to Protect your Forex Trading Capital - 16th May 19
Gold Ratio Charts Offer The Keys to the Bull Market - 16th May 19
Is Someone Secretly Smashing the Stock Market at Night? - 16th May 19
Crude Oil Price Fails At Critical Fibonacci Level - 15th May 19
Strong Stock Market Rally Expected - 15th May 19
US China Trade Impasse Threatens US Lithium, Rare Earth Imports - 15th May 19
Gold Mind Reader's Guide to the Global Markets Galaxy: 'Surreal' - 15th May 19
Trade Wars and Other Black Swan Threats to Your Investments - 15th May 19
Our Long-Anticipated Gold Momentum Rally Begins - 15th May 19
Defense Spending Is Recession Proof - Defense Dividend Stocks - 15th May 19
US China Trade Issues Will Drive Market Trends – PART II - 14th May 19
The Exter Inverted Pyramid of Global Liquidity Credit risk, Liquidity and Gold - 14th May 19
Can You Afford To Ignore These Two Flawless Gold Slide Indicators? - 14th May 19
As cryptocurrency wallets become more popular, will cryptocurrencies replace traditional payments? - 14th May 19
How US Debt Will Reach $40 Trillion by 2025 - 14th May 19
Dangers Beyond a Trade War with China - 14th May 19
eBook - Greatest Tool for Trading? - 14th May 19
Classic Pitfalls for Inexperienced Traders - 14th May 19
Stock Market S&P 500 Negative Expectations Again - 13th May 19
Why Rising Living Standard in China Offers Global Hope - 13th May 19
Stock Market Anticipated Correction Starts On Cue! - 13th May 19
How Chinese Trade Issues Will Drive Stock Market Trends - 13th May 19
Amazon SCAM Deliveries for Fake Verified Purchaser Reviews "Brushing" - 13th May 19
Stock Market US China Trade War Panic - Video - 13th May 19
US Stock Market Leading Macro Economic Indicators Update - 12th May 19
SAMSUNG - BC94.L - Investing in AI Machine Intelligence Stocks - 11th May 19
US Increases Trade Tariffs Against China – Stock Markets, Gold, and Silver - 11th May 19
Who Has More To Lose In A No Deal Brexit? - 11th May 19
Gold at $1,344 Will Start Real Fireworks on the Upside - 11th May 19
Make America’s Economy Great Again - 10th May 19
Big US Stocks’ 2019 Fundamentals - 10th May 19
Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - 10th May 19
Stock Market Shake-Out Continues – Where Is The Bottom? - 10th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Financial Institutions Say Avoid Gold

Commodities / Gold and Silver 2011 Mar 25, 2011 - 12:53 PM GMT

By: Adrian_Ash


THE PRICE OF GOLD ticked higher in London trade on Friday, recovering half of yesterday's 1.5% drop from new record highs above $1447 per ounce as

Silver prices also rallied, regaining a third of Thursday's 3.2% drop from new 31-year highs above $38.20 – some 112% higher from this time last year vs. the Dollar.

European stock markets meantime gave back early gains, but neared the weekend 2.9% higher from last Friday.

The Euro currency meantime slipped back to $1.4130 – one US cent up on the week – as EU politicians signed their "comprehensive package" of stability fund promises, but Portuguese bonds fell sharply again, driving 10-year yields to new post-union highs of 7.80%.

Japanese authorities widened the exclusion zone around the stricken Fukushima nuclear plant, while British warplanes attacked Gaddafi targets in Ajdabiya, "where Libyan rebels are trying to retake the town," according to the BBC.

A new "day of rage" brought hundreds of thousands of both pro- and anti-government protesters onto the streets of Yemen's capital Sanaa.

"Continued conflict in Libya, growing focus on the European debt crisis and uncertainty surrounding the longer-term impact of the Japanese earthquake should keep investors interested in gold and silver," reckons the commodity team at South Africa's Standard Bank today.

But gold and silver bullion markets "temporarily seem tired of both [the Libyan and Japanese] stories," says another London dealer in a note.

Data from TrimTabs this week showed US investors pouring record volume of cash into Japanese equity funds, doubling the previous 1-day record on March 16th – just 5 days after the earthquake and tsunami which killed at least 10,000 people.

With Spanish banks said to be "crawling with hedge fund and private equity people" in a bid to avoid a Madrid bail-out today, "At some point the currency market will wake up the Eurozone debt crisis," says Standard Bank forex strategist Steven Barrow. "But for now, the market seems blinkered."

"[Investors] don't believe in the gold story anymore," declared Kevin Norrish of Barclays Capital on Wednesday, announcing the bank's latest commodity investment survey of institutional players.

"Not one single respondent" chose gold bullion as the likely best performer in 2011, Norrish said.

Crude oil – the survey's top pick for 2011 gains – today ticked back through $105 per barrel of US West Texas Intermediate.

"Avoid gold appears to be one of the most striking messages of the poll," according to Norrish. Some 60% of respondents also said they now favor active strategies in commodities, rather than merely buy-and-hold – up from 20% a year ago.

"As the financial market concerns that supported it in over the past two years fade, gold may now be in need of a new catalyst if its nine-year upward price trend is to be maintained."

The People's Bank of China's new global outlook, releaesed with is 2010 review on Friday, warned that "the risks from European sovereign debt still remain and geopolitical risk may spread, which will give the US Dollar temporary strength [amid] general weakness."

The 125-page report said commodity prices should be firm as "the recovery momentum of the world economy will continue," but gold prices could retreat from their new all-time highs.

"With both Indian and Chinese central banks tightening monetary conditions, we would be surprised if gold demand from China and India remained strong this year," says the latest weekly commodities analysis from French bullion bank Natixis.

"While few Indians would contemplate selling gold, rising interest rates are encouraging cash-strapped holders of gold to use the metal as collateral for new loans. We would view this as part of the process whereby tighter money leads to a less conducive environment for net new investment."

By Adrian Ash

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 , 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 - 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