Best of the Week
Most Popular
1.Trump Delirium Triggers Stock Market Brexit Upwards Crash Towards Dow 20,000! - Nadeem_Walayat
2.The Future Price Of Gold Will Drop Below $1000 In 2017 -InvestingHaven
3.May Never Get Another Opportunity to Buy Gold at this Level Again - Chris_Vermeulen
4.Delirium - The Real Reason Why Donald Trump Won the US Presidential Election - Nadeem_Walayat
5.Why Nate Silver / Fivethirtyeight is one of the Most Reliable Election Forecasting Indicator? - Nadeem_Walayat
6.Gold Price Forecast: Nasty Naughty November Gold Price Trend - I_M_Vronsky
7.Gold Mining Stocks Screaming Buy! Q3’16 Fundamentals - Zeal_LLC
8.Delirium of Trump Mania Win's Mr BrExit US Presidential Election 2016 - Nadeem_Walayat
9.The War On Cash Goes Nuclear In India, Australia and Across The World - Jeff_Berwick
10.Hidden Signs for Gold and Silver - P_Radomski_CFA
Last 7 days
Silver Bullion Price Buying Opportunity for 2017? - 7th Dec 16
The Imminent Multi-Trillion Dollar Surge In Social Security & Medicare Costs - 7th Dec 16
Gold Bullion Price Buying Opportunity for 2017? - 6th Dec 16
Shariah Gold Standard Approved for $2 Trillion Islamic Finance Market - 6th Dec 16
THE Gold Play for 2017 - 6th Dec 16
Trump Sets The Stage For A Huge Gold Rally In 2017 - 6th Dec 16
BrExit Tsunami Claims Emperor Renzi's Scalp, Counting Down to End of the EU, Next? - 6th Dec 16
Failed EU - Means an Expanded Dictatorship - 6th Dec 16
Crude Oil Prices: "Random"? Hardly - 5th Dec 16
The Coming Stock Market Crash and WWIII - 5th Dec 16
This Past Week in Gold Market - 5th Dec 16
Stock Market Short-Term Correction Underway - 5th Dec 16
If Trump Doesn’t Do This, We Will Have the Great Depression 2.0 - 5th Dec 16
India’s Demonetization Could Be the First Cash Domino to Fall - 5th Dec 16
Our Future Economy, Jobs, Banking, And Governance - 5th Dec 16
Gold and Silver Bullion Buying Opportunity for 2017? - 4th Dec 16
First UK BrExit then Trump, Next BrExit Tsunami Wave to Hit Italy HARD Sunday! - 3rd Dec 16
The 10YR Yield and SPX Stocks Bull Markets - 3rd Dec 16
Gold And Silver – Do Not Expect Much Difference With Trump Compared To Obama - 3rd Dec 16
Gold, Currencies and Markets Critical 61.8% Retracements - 2nd Dec 16
Gold Junior Stocks Q3’16 Fundamentals - 2nd Dec 16
Adventures in Castro’s Cuba - 2nd Dec 16
We Are Putting Off the Inevitable - 2nd Dec 16
Macroeconomic Cycles & Demographics - A Fuse, An Explosive and The Igniting Catalyst - 2nd Dec 16
How Moving Averages Can Identify a Trade - 1st Dec 16
Silver Prices and Interest Rates - 1st Dec 16
America, is it Finally time for us to say Goodbye? - 1st Dec 16
Blockchain Technology – What Is It and How Will It Change Your Life? - 1st Dec 16
Burn the Flags, Can Trump Salvage The Sinking US Economic Ship? - 1st Dec 16
Will US Housing Real Estate Market Tank in 2017? - 1st Dec 16
Referendum Puts Italy's Government to the Test - 30th Nov 16
Why We Haven’t Seen Gold Price Rally after Trump Victory - 30th Nov 16
Breakdown and Slide in Crude Oil Price - 30th Nov 16
A 'Wicked Rally' in Gold Price Predicted - 30th Nov 16
Silver Market Sentiment Looks Golden - 30th Nov 16
Indian Demonetization Denotes Severe Stress in the Global Gold Market - 30th Nov 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

$10000 Gold

Gold Capped atg $1,580, Hit by Another Concentrated Burst Of Selling On High Volume

Commodities / Gold and Silver 2012 May 30, 2012 - 03:15 PM GMT

By: GoldCore

Commodities

Best Financial Markets Analysis ArticleGold’s London AM fix this morning was USD 1,548.75, EUR 1,244.98, and GBP 995.41 per ounce. Yesterday's AM fix was USD 1,573.75, EUR 1,254.48, and GBP 1,003.67 per ounce.

Silver is trading at $27.75/oz, €22.39/oz and £17.87/oz. Platinum is trading at $1,416.25/oz, palladium at $597.75/oz and rhodium at $1,275/oz.


Gold fell 0.89% or $14.00 in active trading yesterday and closed at $1,558.80/oz. Gold fell marginally in Asia but remains in a tight range. In European trading gold is hovering near the $1,550/oz level.


Determined selling at the $1,580/oz level capped gold yesterday prior to a bout of sharp selling. This saw gold quickly fall $20 from $1,575/oz to $1,555/oz on heavy volume. Tuesday’s COMEX gold futures volume was well over 450,000 lots – which is close to the record for 2012 and volume more than doubled its 30 day average.

Gold 5 Day Chart – (Bloomberg)

Counter intuitively, gold turned sharply lower due to another bout of concentrated selling despite a distinct lack of market moving news – indeed market news was quite gold bullish. There were mere rumours that Egan Jones had downgraded Spain. The downgrade rumour , which was subsequently confirmed, saw the euro fall only marginally - from 1.253 to 1.248 and little movement in equities.

Gold is weaker again today despite heightened risk aversion on fears that the euro crisis is escalating. Concerns about Italy have resurfaced after their 10 year bond yield rose above the important 6% level this morning.

Gold has recently tracked the euro as many investors opted for the dollar over safe haven gold bullion in the near term. This was graphically seen during the Lehman and AIG crisis when gold also fell in the short term prior to quickly basing and making a speedy recovery soon after.

We would expect a similar pattern to take place again and the counter intuitive short term gold price movement of late will likely soon give way to a reassertion of the gold’s primary secular bull market trend.

Cross Currency Table – (Bloomberg)

Ongoing concerns about the euro, the downgrading of Spain and the risk of contagion is of course bullish for gold but gold can often be correlated with risk assets such as equities (and risk currencies such as the euro) in the short term.

Gold has risen from below €500 to over €1,200 in last 5 years so correlation with the euro is clearly short term.

Gold is inversely correlated with the dollar and all fiat currencies over the long term and best for investors and store of value buyers to fade out the short term noise of gold's corrections and short term correlation with risk assets.

Greece's elections on June 17th may be a short term positive for the euro if pro bailout parties win, however this is way too far away to call and the scale of the debt crisis in Europe suggests that national currencies may return or that the euro will be devalued or a combination thereof.

Some market watchers are waiting for central banks to give a clear signal as to whether they are going to inject trillions of more euros, pounds and dollars into struggling economies.

The near certain further debasement of currencies in the coming months will benefit gold.

Gold 1 Year Chart – (Bloomberg)

India’s recent gold purchasing power has been hurt by the country’s weak currency and it is expected that buying will remain slow until their rainy season ends in September.

However demand from China and the rest of Asia remains robust. "While Indian demand has been lower than normal, overall we continue to see decent buying interest from the rest of Asia," says Standard Bank, “especially South East Asia.”

Speculators and some investors are waiting on the sidelines for more clues regarding price direction but smart money such as George Soros, David Einhorn, Kyle Bass, Marc Faber, pension funds, institutions such as PIMCO and central banks continue to diversify into gold.

The smart money understands the diversification benefits of gold and knows that investments, pensions and protecting and preserving wealth is about owning quality assets and currencies over the long term.

For the latest news and commentary on financial markets and gold please follow us on Twitter.

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

© 2005-2016 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

Catching a Falling Financial Knife