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
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
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19
Gold Price Gann Angle Update - 10th July 19
Crude Oil Prices and the 2019 Hurricane Season - 10th July 19
Can Gold Recover from Friday’s Strong Payrolls Hit? - 10th July 19
Netflix’s Worst Nightmare Has Come True - 10th July 19
LIMITLESS - Improving Cognitive Function and Fighting Brain Ageing Right Now! - 10th July 19
US Dollar Strength Will Drive Markets Higher - 10th July 19
Government-Pumped Student Loan Bubble Sets Up Next Financial Crisis - 10th July 19
Stock Market SPX 3000 Dream is Pushed Away: Pullback of 5-10% is Coming - 10th July 19
July 2019 GBPUSD Market Update and Outlook - 10th July 19

Market Oracle FREE Newsletter

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

Gold Hits New Dollar & Sterling Records, Fundamentals "Very Supportive"

Commodities / Gold and Silver 2011 Apr 19, 2011 - 09:25 AM GMT

By: Adrian_Ash

Commodities

THE WHOLESALE PRICE of physical gold rose again in London trade on Tuesday, hitting fresh record highs for both US Dollar and British Pound investors after yesterday's "negative watch" announcement on US government debt from ratings agency Standard & Poor's – a "shot heard round the world" according to one London bullion dealer.


Asian stock markets closed Tuesday lower, but European equities rose.

US Treasury bond prices actually rose, despite S&P forecasting "at least" a one-in-three chance it will downgrade the United States' long-term debt from AAA status by 2013, unless Washington cuts its deficit spending.

The Dollar knocked the Euro currency almost 4¢ lower as "peripheral Europe" government debt fell yet again.

"You really have to wonder how anyone can write with a straight face that this warning caused other market movements," says Princeton professor and Nobel laureate Paul Krugman of the S&P announcement.

"A significant push toward fiscal austerity would lead to lower growth," replies Jan Hatzius at investment bank Goldman Sachs, "and lower growth would lead to easier monetary policy for longer."

"Gold is re-asserting itself as an alternative currency," London-based mining-fund manager Evy Hambro of Blackrock was quoted by Bloomberg TV this morning.

"On a 3-to-5 year period," said Hambro, noting the key drivers for investors to buy gold, "the underlying trends are all very supportive of today's pricing and higher."

The price of gold in Euros also held onto Monday's sharp gains today, trading near to last night's 14-week highs at €33,800 per kilo – less than 1% below Dec. 2010's all-time high.

UK investors looking to buy gold saw the price touch £920 per ounce,  a new all-time high.

"We see some selling interest today on profit-taking, but not in large volume," a dealer told Reuters overnight in Hong Kong, where premiums on large wholesale gold bars ticked up to $1.50 per ounce above London's benchmark pricing.

"There is so much news that is in favour of gold," the newswire quotes a Singapore dealer.

"Gold is still the safe-haven of choice."

In Tokyo today, fiscal-policy chief Yosano and finance minister Noda of Japan – the world's second-largest holder of US government debt after China – both called US Treasury bonds "attractive".

"This is a timely reminder of the seriousness of America's fiscal issues, for the country and for the rest of the world," says bond-giant Pimco's chief investment officer Mohamed El-Erian.

As Helsinki today moved to form a new government including the "no bail outs" True Finns party, which won almost one-fifth of the votes in Sunday's Finnish election, Portugal's 10-year bond yield today rose above 9.0%, worsening the pressure for a swift IMF-Eurozone rescue.

"Spain, Italy and Belgium had been shielded from the events in Greece, Ireland and Portugal for a long time," said Christoph Rieger, fixed-income strategist at Commerzbank, to Bloomberg TV this morning.

"But with risk events culminating over the last few days, and also [new debt auction] supply lined up for later this week, we're seeing increasing contagion [in their] bonds."

Silver prices meantime held firm but failed to set a new 31-year Dollar high for the first session in four on Tuesday, trading just above $43 per ounce.

"[Selling silver short] natural with these giddy prices," one London trader told the Platts news service on Monday. "Speculators are going to have to take profits soon.

"Shorts have been burned in the run-up, but keep coming back for more," he said, forecasting a $10 silver price drop in short order.

But "Gold and silver prices are likely to continue to climb higher in reaction to inflation concerns," retorts HSBC senior analyst James Steel, "buoyed by rising food and energy prices, renewed European Union sovereign risks, and disagreement among top policymakers as to how to cope with the global crisis."

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