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
How to Play Interest Rates in US Real Estate - 20th Aug 19
Stocks Likely to Breakout Instead of Gold - 20th Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 20th Aug 19
WAYS TO SECURE YOUR FINANCIAL FUTURE - 20th Aug 19
Holiday Nightmares - Your Caravan is Missing! - 20th Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

Gold and Silver Get Blasted as Erratic Markets Move to Cash

Commodities / Gold and Silver 2011 Sep 26, 2011 - 07:50 AM GMT

By: GoldCore

Commodities

Gold is trading at USD 1,613.00, EUR 1,198.37, GBP 1,040.91, JPY 123,180, AUD 1,654.44 and CHF 1,465.41 per ounce.

Gold’s London AM fix this morning was USD 1,615.00, EUR 1,198.96,and GBP 1,041.87 per ounce.


Yesterday’s AM fix was USD 1,730.00, EUR 1,279.68, and GBP 1,119.81 per ounce.

Gold and silver were caught in the headlights of the "Risk Off" juggernaut last week, the carnage was not helped by a poorly timed margin increase out of the Comex and Shanghai Gold Exchange. Asian markets maintained the bearish slant overnight with the NIKKEI selling of 2%; gold was at one point off by more than $100/oz, trading at $1,550/oz, but has since staged a modest recovery and is trading now at $1,613/oz.

Markets Move to Cash

Why Did Gold Sell Off So Aggressively?

Large liquid asset prices tend to approach efficiency, over time. When new information is ingested by the market the price of securities is adjusted up, down or not at all. Currently markets in general are nervous as they were caught off guard by the Fed statement last week, which outlined a weaker U.S. economic growth forecast. Moreover, the negative sentiment is being compounded by commentary from a host of world leaders and institutions, urging action on Europe and debt problems in general. At times like this leveraged market participants (hedge funds and proprietary trading desks) must assign a fair value for the holdings that they own. Trading desks must adjust books for a slower economic growth forecast, which creates lower corporate earnings and translates into lower stock prices. The Fed comments sparked the sell off.

All this activity feeds off itself and the markets can quickly find themselves in a destructive downward spiral where fairly valued assets are sold off aggressively. Margin holders of assets are forced to sell, active traders, trying to get ahead of the market position themselves to profit from these market moves. Passive market participants, typically the general public, will then look at this market activity and consider selling as they will logically ask themselves, "What is it that the market knows and that they do not?". Eventually over time a consensus begins to form and the volatility of the markets (the velocity of price change) begins to calm down, until the next quantum shift in market knowledge occurs.

The fundamentals underpinning gold have never been sounder. The correct price for gold is a matter of interpretation but it is fair to say the resent price moves in the metal have nothing to do with a change in the fundamentals. Indeed, the selling activity was a mass liquidation event that affected most asset classes across the board and benefited the U.S. dollar as investors went to ground, hiding in cash.

It is important to note that the underlining problem of debt and the issuing, redemption and/or forgiveness of debt are the questions being tackled by the political classes. The world economy is at a cross roads with many sub-optimal imbalances dragging back growth. Most if not all of these imbalances are the result of parochial and ill-conceived fiscal and monetary policies of powerful countries that refused to take in account the global affects of their actions. Capital markets are increasingly taking their cue from official actions as opposed to the fundamentals of capitalism. Unfortunately for policy makers, the confusion that they are inadvertently sowing, viz-a-vis the weaknesses of their institutions, is in its self eroding confidence and thus restraining consumer spending. Washington and Brussels are attempting to address the problem, but "Do they have the political mandate to effect the necessary changes?" is the question of the hour.

For our latest news and commentary follow us on Twitter.

SILVER
Silver is trading at $28.60/oz, €21.15/oz and £18.42/oz

PLATINUM GROUP METALS
Platinum is trading at $1,548.20/oz, palladium at $626/oz and rhodium at $1,625/oz

GOLDNOMICS - CASH OR GOLD BULLION?



'GoldNomics' can be viewed by clicking on the image above or on our YouTube channel:
www.youtube.com/goldcorelimited

This update can be found on the GoldCore blog here.

Yours sincerely,
Mark O'Byrne
Exective Director

IRL
63
FITZWILLIAM SQUARE
DUBLIN 2

E info@goldcore.com

UK
NO. 1 CORNHILL
LONDON 2
EC3V 3ND

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

W www.goldcore.com

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore 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