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
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19
Gold and Silver - The Two Horsemen - 11th Nov 19
Towards a Diverging BRIC Future - 11th Nov 19
Welcome to the Zombie-land Of Stock Market Investing - 11th Nov 19
Illiquidity & Gold And Silver In The End Game - 11th Nov 19
Key Things You Need to Know When Starting a Business - 11th Nov 19
Stock Market Cycles Peaking - 11th Nov 19
Avoid Emotional Investing in Cryptocurrency - 11th Nov 19
Australian Lithium Mines NOT Viable at Current Prices - 10th Nov 19
The 10 Highest Paying Jobs In Oil & Gas - 10th Nov 19
World's Major Gold Miners Target Copper Porphyries - 10th Nov 19
AMAZON NOVEMBER 2019 BARGAIN PRICES - WD My Book 8TB External Drive for £126 - 10th Nov 19
Gold & Silver to Head Dramatically Higher, Mirroring Palladium - 9th Nov 19
How Do YOU Know the Direction of a Market's Larger Trend? - 9th Nov 19
BEST Amazon SMART Scale To Aid Weight Loss for Christmas 2019 - 9th Nov 19
Why Every Investor Should Invest in Water - 8th Nov 19
Wait… Was That a Bullish Silver Reversal? - 8th Nov 19
Gold, Silver and Copper The 3 Metallic Amigos and the Macro Message - 8th Nov 19
Is China locking up Indonesian Nickel? - 8th Nov 19
Where is the Top for Natural Gas? - 7th Nov 19
Why Fractional Shares Don’t Make Sense - 7th Nov 19
The Fed Is Chasing Its Own Tail; It Doesn’t Care What You Think - 7th Nov 19
China’s path from World’s Factory to World Market - 7th Nov 19
Where Is That Confounded Recession? - 7th Nov 19
FREE eBook - The Investment Strategy that could change your future - 7th Nov 19

Market Oracle FREE Newsletter

How To Buy Gold For $3 An Ounce

Gold Recovers One-Third of Monday's 5% Plunge as Yen Retreats; Driven Higher by "Bargain-Hunting & Short-Covering"

Commodities / Gold & Silver Nov 13, 2007 - 08:49 AM GMT

By: Adrian_Ash

Commodities

SPOT GOLD PRICES bounced 1.6% from their overnight low on Tuesday morning, reversing one-third of Monday's $41 plunge to hold above $800 per ounce.

"There seems to be bargain hunters at below $800," said Ronald Leung of Lee Cheong Gold Dealers in Hong Kong earlier. "I think $792 and $793 are the supporting levels.


"It's only a healthy correction, not a bear market. It's attracting some buying interest."

Crude oil prices continued to slip, meantime, dropping to $94.56 per barrel of US light & sweet for Dec. delivery by midday in London .

The Nikkei stock index in Tokyo slipped for the eighth day running, taking its total losses for the year-to-date to more than 12%. Here in London the FTSE dropped 0.3% by late morning. Paris and Frankfurt stocks both lost 0.5% on average.

Wall Street stock futures pointed up after four days of losses, led yesterday by a "Who's Who" of the year's best performers as Reuters puts it, including Apple and Google.

"Having hit the massive technical level of the old 1980 high the Gold Price is correcting," notes Phil Smith for Reuters India today. "Pretty predictable stuff technically, with a level like that always going to be a tough nut to crack.

"As we have said many times it is very possible we retrace to again to test the three-month uptrend line [now around $780 per ounce]. Look for support there."

On the currency markets the Euro bounced back above $1.4600 after hitting a new one-week low of $1.4525 overnight, only to slip back as the session unfolded.

For French and German investors looking to Buy Gold Today , the price bounced off a two-week low of €545 overnight – more than 4% below Monday's opening – to trade at €550 per ounce.

The British Pound also rose, recovering nearly 1.5¢ from its two-week low of $2.0540 and holding the Gold Price in Sterling below £389 per ounce.

Versus the Japanese Yen, the US Dollar regained ¥1 from its 18-month low of ¥109.40 after Yasuo Fukuda, prime minister of Japan since the administration of Shinzo Abe collapsed in Sept., warned currency speculators to "be careful" of backing the Yen to rise.

"In the short term, Yen appreciation would certainly be a problem," Fukuda told the Financial Times . "Any kind of sudden change in exchange rates would not be desirable.

Pointing to the Yen's sudden 18-month highs against the Dollar, "it really is a reflection of the state of the US economy," he went on. "What we can do is limited. But speculative movements, I believe, need to be held in check.

"What I am saying is be careful so that [intervention] will not happen."

Japan now holds $893 billion in foreign currency reserves, much of it in US Dollars. Between 2001 and 2006, Tokyo poured $420 billion into the currency markets, selling Yen in a bid to push it lower.

According to The Economist 's Big Mac Index of purchasing power, the Yen remains more than 25% under-valued today. The British Pound, on the other hand, is now around 22% over-valued against the US Dollar – and yet the cost of living for British consumers continues to rise regardless, driven by near-zero rates of real interest paid on bank savings after tax and inflation.

Consumer Price Inflation in the UK broke back above the Bank of England's 2.0% target last month, driven by the surge in crude oil prices. Ali al-Naimi, the Saudi oil minister, today denied earlier reports that the Opec oil cartel will even discuss raising output quotas to prevent further price gains when it meets this week in Riyadh .

In the Eurozone, meantime, industrial production fell 0.7% month-on-month in Oct., said the statistics agency today. Germany 's much-watched ZEW index of economic sentiment sank to a reading of -32.5, well below both the -20.0 expected and Sept.'s reading of -18.1.

All eyes now are on the US pending home sales numbers due out at 16:00 EST. Analysts forecast a further 2.5% drop in Sept. from August's record 6.5% fall.

Back in the Gold Market , and as the Yen slipped back today from the sudden and shocking "carry-trade" unwinding seen during the previous two sessions, the Gold Price in Yen bounced nearly 2% from its three-week low to trade above ¥88,000 per ounce.

Gold futures traded at the Tocom continued to slip, however, losing another 1.2% today to equal $816 per ounce for delivery in Oct. '08.

"The Gold Market has been long and overbought for quite a long time," said a Hong Kong dealer to Reuters earlier today.

"It's a reverse of direction but we've also seen bargain hunting and short covering at the Tocom."

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