Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and Stock Markets Surge on Monolie Bond Insurers Rescue Plan

Commodities / Gold & Silver Jan 24, 2008 - 12:05 PM GMT

By: Adrian_Ash

Commodities

THE SPOT GOLD MARKET gained 0.8% to break above $900 per ounce in London on Thursday, while European stock markets posted their biggest one-day gains since the Tech Stock Crash bottomed in March 2003.


The surge in equities came despite news that Societe Generale – France's second-largest bank – has lost €4.9 billion ($7.1bn) thanks to a lone stock trader applying the "double or quits" strategy of Nick Leeson at Barings and Yasuo Hamanaka at Sumitomo Corp.

Announcing what may prove to be the world's biggest ever "rogue trader" losses, SocGen also admitted to a further €2.05 billion writedown of its credit-related investments.

"The situation of financial institutions is likely to improve" however, reckon analysts at Dresdner Kleinwort in a report today, "and this might stabilize stock markets, which would be positive for gold."

"It would not only be positive for Gold Prices as investors stop selling gold to cover losses on other assets, but also via a weaker US Dollar and rebounding crude oil prices."

The world's commodities markets rallied early on Thursday, with crude oil bouncing from a three-month low and copper traded at the London Metal Exchange rising at the fastest pace in a fortnight.

Corn, wheat and soybean prices also rose.

But Asian stock markets suffered a very mixed session, with Hong Kong selling off a further 2% while Tokyo bounced by the same proportion as the Japanese government debated a package of emergency support that would scrap both capital gains and dividend taxes.

Today's Financial Times reports that state-controlled pension funds in China , Taiwan and South Korea are now planning to raise their equity investments in a bid to support stock prices.

This morning in the United States, Ford Motor Co. said it lost $2.7 billion in the last three months of '07, taking its total losses for the year to $2.8bn.

"There should be a lot of [gold futures] traders hoping to cover their shorts at a better price today," says Christopher Langguth in Mitsui's technical note, but "on the upside [above] $897 the buying will probably be aggressive.

"Very few shorts will be willing to wait and see if it takes out $916.10 before covering."

At the Tocom in Tokyo, gold for delivery in Dec. '08 ticked ¥5 lower, slipping to ¥3,066 per gram – equivalent to $894 per ounce – as the Japanese Yen pulled back from last night's 30-month highs on the currency markets.

Both the Euro and British Pound then touched one-week highs vs. the Dollar above $1.4680 and $1.9640 respectively. But the recovery in Gold Prices outpaced them all, hitting seven-session highs for British investors above £459.90 per ounce.

The Gold Price in Euros hit new all-time record highs above €615 per ounce.

Further east meantime, "the research center at BDO Unicon auditing and financial services found that metals accounts were the most profitable savings instrument for the public in 2007," reports Kommersant in Moscow today, "providing a real income in Russian Rubles of 13.7%."

The Gold Price today gained more than 3.5% from Tuesday's low against the Ruble. ( If Russians are Making an Income from Gold why aren't you? Read on here... )

Over in the debt markets, the cost of financial insurance slipped across Asia and Europe, with the price of credit default swaps (CDS) on higher risk European debt dropping by 7%. The cost of Japanese CDS fell by one-tenth on the Markit Index.

And extending yesterday's late surge on Wall Street, the FTSE Eurofirst index of 300 blue-chips rose by 4.9% this morning as further details emerged of the New York State insurance regulator's demand that US banks support the ailing "monoline" credit insurers with a $15 billion package.

The monoline insurers now stand behind $2.4 trillion in corporate, credit and municipal bonds. Last Friday the world's second-largest bond insurer – Ambac Financial – had its own credit rating downgraded from the crucial "triple-A" status it requires to raise fresh funds.

"Investors will continue to buy precious metals like gold, silver, and platinum to offset paper losses in other markets," says Roland Jansen, head of investment at Juno Mother Earth, a $150 million US asset manager.

"Inflation will increase worldwide and is much higher than the official published statistics of governments."

 

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

© 2005-2022 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