Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Gold and Oil Fall as Pressure Builds for European Interest Rate Cuts

Commodities / Gold & Silver Dec 03, 2007 - 08:21 AM GMT

By: Adrian_Ash

Commodities

THE SPOT GOLD MARKET slipped back from an overnight spike early Monday to hit $778 per ounce – a two-week low – just before the US open.

Asian stock markets were little changed, while European bourses began the week lower. Wall Street futures pointed down, capping their four-day rally, and crude oil futures dropped almost a dollar to trade at a one-month low beneath $88 per barrel.


More than 11% off the all-time record of two weeks ago, oil futures were sold aggressively ahead of this week's meeting of the Opec cartel in Abu Dhabi, which is likely to discuss output quotas, if not actually raise them.

"We feel this is very much a wait and see market," says Brandon Lloyd in his Gold Price report for Mitsui in Sydney this morning.

"As with everything else, it looks like volatility is going to rule the roost. No one trader REALLY knows where anything is going."

After losing value for four sessions running on Friday, Comex Gold Market futures for Feb. delivery jumped $7.70 in Asian trade today, hitting $796.8 per ounce before falling below last week's closing level.

"Everybody is looking for the Gold Price to go down," said one Singapore gold dealer to Reuters earlier this morning.

"Of course this is good for my customers, especially jewelers. In fact, the physical Gold Market is busy with people buying back gold bars.

"We are having good buying from Vietnam , Indonesia and Thailand ."

At the Tocom futures exchange in Tokyo today, the most-active contract (Oct. '08) saw the Gold Price fall 0.5% to equal $798 per ounce as the Japanese Yen bounced on the currency markets.

The US Dollar, having added 3.9% against the Yen since last Tuesday, slipped out of that uptrend, but it kept the Euro near a two-week low at $1.4640.

The British Pound, meantime, leapt more than one cent higher to $2.0630 after last month's Purchasing Managers Index came in well above City forecasts, denting hopes of a cut to UK interest rates when the Bank of England meets this Thursday.

That rise in Sterling , coupled with weakness in the Gold Market , wiped out all of gold's November gains for British investors as it slipped back from last Monday's record high of £404.50 to £377.20 per ounce.

The manufacturing news also pushed UK government bond prices lower, after an early rally saw the two-year gilt yield slip four points to 4.47%. Bank of England interest rates are currently 5.75%, the highest of any G7 economy, and a Bloomberg survey today shows 44 out of 61 professional economists interviewed expect the BoE to keep rates on hold this week.

But London 's interbank borrowing rate closed last week at 5.95%, more than 0.6% higher from the end of Oct., and "policymakers cannot wait to see spillover effects of tighter credit conditions on the economy," says the Bank Credit Analyst .

"Quality spreads have soared and bid/ask spreads have blown out around the world. In Europe , it is alarming that interbank dealing in covered bonds came to a halt last week and planned high-quality debt issuance was cancelled.

"Interbank lending is the main channel through which central banks affect financial markets and the economy. [So] the US Fed needs to cut interest rates promptly, and pressure is building on other central banks to follow suit.”

US home-loan bosses met this weekend to agree a Treasury Dept. plan that could freeze "teaser deal" rates for the next seven years.

Deutsche Bank reckons that Treasury Secretary Paulson's plan is to prevent higher interest rates hurting some 1.2 million families, now holding mortgage loans worth $258 billion.

"The message is that everybody has to get on the bus," one source told Reuters. But any repayment vacation is likely to face legal challenges from mortgage-bond investors – while in the marketplace for mortgage-backed securities last week, a firesale of home-loan bonds by ailing stock broker E*Trade raised as little as 11¢ on the Dollar according to independent analysis.

In the broader commodities sector this morning, grains were mixed while copper and lead prices fell at the London Metal Exchange. Zinc also fell, dipping into last week's gains and taking its losses over the last two months to 16%.

The supply of zinc may rise by more than one-tenth in 2008 according to a new report from UBS today, as 15 new projects come on-stream.

Gold production in Australia , in contrast – the world's third largest producer – held flat between July and October according to a report out today from Surbiton Associates.

Australia produced 61.7 tonnes of gold in the third quarter, around one tonne less than during the second quarter and equal to output to Q3 '06.

"Each year, around 250 tonnes – or eight million ounces, worth more than $7 billion – are mined in Australia and an equivalent amount of gold must be discovered annually just to maintain reserves," said Sandra Close, director of Surbiton Associates, to the Herald Sun .

"In the longer term, there is no substitute for exploration."

News of Australia 's flattening gold output comes less than a week after the Gold Price for Australian investors hit a new all-time record high of A$939 per ounce.

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