Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
IBM - Investing in AI Machine Intelligence Stocks - 25th May 19
Seasonal Dysfunction: Why Generations of Gold and Silver Investors Are Having Such Difficulty - 25th May 19
Employment - The Good and the Bad of Job Automation - 25th May 19
Gold Mining Mid-Tier Stocks Fundamentals - 25th May 19
Buy This Pick-and-Shovel 5G Stock Before It Takes Off - 25th May 19
China Hang Seng Stocks Index Collapses and Commodities - 24th May 19
Costco Corp. (COST): Finding Opportunity in Five Minutes or Less - 24th May 19
How Free Bets Have Impacted the Online Casino Industry - 24th May 19
This Ultimate Formula Will Help You Avoid Dividend Cutting Stocks - 24th May 19
Benefits of a Lottery Online Account - 24th May 19
Technical Analyst: Gold Price Weakness Should Be Short Term - 24th May 19
Silver Price Looking Weaker than Gold - 24th May 19
Nigel Farage's Brexit Party EU Elections Seats Results Forecast - 24th May 19
Powerful Signal from Gold GDX - 24th May 19
Eye Opening Currency Charts – Why Precious Metals Are Falling - 23rd May 19
Netflix Has 175 Days Left to Pull Off a Miracle… or It’s All Over - 23rd May 19
Capitalism Works, Ravenous Capitalism Doesn’t - 23rd May 19
The Euro Is Bidding Its Time: A Reversal at Hand? - 23rd May 19
Gold Demand Rose 7% in Q1 2019. A Launching Pad Higher for Gold? - 23rd May 19
Global Economic Tensions Translate Into Oil Price Volatility - 22nd May 19
The Coming Pension Crisis Is So Big That It’s a Problem for Everyone - 22nd May 19
Crude Oil, Hot Stocks, and Currencies – Markets III - 22nd May 19
The No.1 Energy Stock for 2019 - 22nd May 19
Brexit Party and Lib-Dems Pull Further Away from Labour and Tories in Latest Opinion Polls - 22nd May 19
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
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

Market Oracle FREE Newsletter

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

Investors Flock To Gold as Global Banking Crisis Worsens

Commodities / Gold & Silver Jan 14, 2008 - 10:26 AM GMT

By: Adrian_Ash

Commodities THE SPOT GOLD MARKET surged into the London opening once again on Monday, starting the week at a new record high of $914 per ounce and hitting record highs against all other major currencies, too.


"The fresh flows of investment into commodities are gaining pace as news on the US economy continues to worsen," says Mitsui, the metals dealer, in a note today.

"Our projection for gold (for there is little other technical analysis to look at) is $975, but with Gold Market volatilities increasing, the possibility of a significant pullback is growing."

US stock futures pointed higher as the Wall Street opening drew near, but the S&P 500 index has now fallen for three weeks running to lose 4.6% from New Year's Eve – "the worst start since 1982," according to Bloomberg.

Citigroup Inc. is rumored to face fresh losses of $24 billion on its mortgage-bond investments, and a report from CNBC also forecasts 24,000 lay-offs when the world's largest bank reports fourth-quarter results on Tuesday.

Today's Financial Times says Merrill Lynch – due to report on Thursday, and widely expected to write-down a further $10-20 billion in mortgage-bond losses – is now looking to raise $4bn in capital funds, with the state-owned Kuwait Investment Authority set to take a "significant" stake.

"The weak Dollar, the simmering pot called Iran, crude oil at $100 per barrel (and likely to rise much higher this year), a deadbeat US presidency, a probable US recession, collapsed credit, diabolical consumer confidence...Little wonder investment money is flocking to gold," says Jessica Cross of the Virtual Metals consultancy at MiningMX.com today.

"But the increase in speculative positions in gold futures – now at a net long of 1,600 tonnes – means a correction, when it happens, could be devastating," she adds. "Some of the big investment banks are already privately advising clients to get ready to sell at a moment's notice."

The "net long" position of speculative traders at the Comex in New York grew by 3% in the week to last Tuesday, says the latest official data, hitting a record 205,404 contracts. On the other side of the trade, however, betting on US interest-rate futures is now unanimous that the Federal Reserve will cut 0.5% off the cost of borrowing Dollars when it meets on Jan. 30th.

This time last week the futures market priced a 50-basis points cut at 66%.

"We can find higher and higher Gold Price targets depending on how gloomy we get on the macro-economic mix and the policy settings that are likely to follow," says Sean Corrigan, chief investment strategist at Diapason Commodities Management in Lucerne , Switzerland .

"On the way up in this latest leg there was good support at $850. Several times we tried to dip back towards it, but gold was immediately bought back, and that's given us the impetus for this round.

"The general trend here is the one we like. You're buying commodities as much for inflation protection as for growth [and] precious metals are the obvious outlet for this. We've got safe haven worries as well, and everything is coming together.

That said, "there is a huge speculative long in this position," says Corrigan, "so you've got to worry about a sudden lurch down before the next move higher."

Asian stock markets fell yet again this morning, closing the day 1.9% lower in Tokyo and losing 1.5% in Hong Kong . Gold futures traded at Japan 's Tocom exchange rose 1.6% to breach ¥3,100 per gram for the first time in 24 years.

On the currency markets the Euro broke through $1.4900 for the first time since last month, when the single currency made life-time record highs just shy of $1.5000. But today's move failed to cap the surging Gold Price in Euros , however, which shot 1.5% higher from its overnight low to hit new highs above €613 per ounce.

For British investors wanting to Buy Gold today, the metal gained more than 1.6% as London opened to reach £465.50 per ounce – nearly £30 higher per ounce from this time last week.

In the commodity markets today crude oil held flat after the Qatari energy minister said the Opec oil cartel – which accounts for more than 40% of the world's daily supply – "cannot control market forces."

"They can't control the geopolitics," said Abdullah al-Attiyah to reporters in Doha . "They can't control the speculation."

Copper prices rose in Shanghai to a two-month high on news that China 's copper imports grew by 8.6% last month from Dec. '06. Zinc and aluminum prices slipped, while soybean futures traded in Dalian , China , jumped to new all-time highs.

The new gold futures contracts being traded at the Shanghai Futures Exchange gained 0.5% for the session to equal $938 per ounce for June delivery.

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 2008

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