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
S&P Stock Market Trend Forecast to Dec 2024 - 16th Apr 24
No Deposit Bonuses: Boost Your Finances - 16th Apr 24
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
S&P SEASONAL ANALYSIS - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Traders Bullish But "Caution Advised"

Commodities / Gold and Silver 2012 Oct 08, 2012 - 06:46 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleWHOLESALE-MARKET prices to buy gold fell 0.5% to $1770 per ounce in Asian and London trade Monday, holding more than $25 below Friday's new 11-month high as world stock markets also fell together with commodity prices.

Chinese traders wanting to buy gold saw the price fall sharply as the Shanghai futures market re-opened after the long Golden Week holidays.



Silver prices fell nearly 5% from last week's new 7-month high against the US Dollar, hitting the lowest level in nearly two weeks.

"We are somewhat cautious on gold here," says a note from commodity brokerage Intl FC Stone.  "It has had a very good run higher over the past several weeks, while chart-wise, it looks like it could back away further from stiff resistance between $1790-1800.

"However, we still would look to buy gold on any substantial pullback, as it will likely be one of the prime beneficiaries of the massive easing policies we are seeing put through practically the world over."

Monday saw both the Japanese and US financial markets closed for national holidays.

Last week saw a new record in the size of gold ETFs, with the volume of bullion held to back these stockmarket-traded trust funds swelling to nearly 2,570 tonnes according to Bloomberg data.

Speculators in the US gold futures and options market also raised their betting, taking their net long position (of bullish minus bearish positions) to its highest level since August 2011 at the equivalent of 941 tonnes.

So-called "small speculators" led the charge, raising their net long position as a group for the 7th week running to equal 195 tonnes – a series record according to official data from the CFTC regulator.

"The weekly uptrend remains in place" in Dollar gold prices, says the latest technical analysis from bullion market-maker Scotia Mocatta, "with support at $1613 and resistance at the all-time high of $1921."

"Momentum was slower" last week in the growing gold futures' position however, notes Standard Bank's commodity team here in London.

"That indicates market participants are increasingly wary of adding length in this post-QE3 environment."

Over in the commodity market Monday morning, crude oil lost more than 1% and base metals also fell hard after the International Monetary Fund cut its growth forecast for the East Asian economies.

Now predicting 7.7% growth for 2012 – down from May's forecast of 8.2% – the IMF says next year will see growth of 8.1% rather than the previous prediction of 8.6%.

ANZ Bank meantime warns that slowing demand from China could see 1-in-3 of the 900-odd mineral projects now being planned in Australia put on hold.

Advertisements for new jobs in Australia have been declining for 6 months, ANZ research adds elsewhere, taking the total of vacant positions down 11% from a year ago.

"The big bogeyman in the closet is China and everyone is trying to guesstimate if it's going to have a hard landing or a soft landing," says Philippe Gijsels at BNP Paribas Fortis Global Markets in Brussels, speaking to Reuters.

China's demand to buy gold is now the world's second-heaviest after India. Together those two countries account for over 50% of annual consumption worldwide.

HSBC analysts today said China's services sector grew sharply in September, rebounding from a 1-year low on the bank's Purchasing Managers' Index.

Those data are at odds however with Beijing's official non-manufacturing PMI released last week, which showed the services sector of the world's second-largest economy slowing to its weakest level in two years.

Meantime in Europe, finance ministers from the Eurozone states today gathered in Luxembourg for the first board meeting of the new €500 billion Stabilization Mechanism fund.

Spanish bond prices rose with German, French and Dutch government debt – nudging their interest rates lower. Italian bond prices slipped, raising Rome's borrowing costs.

The Euro edged back beneath $1.30 as the US Dollar rose against all currencies bar the Japanese Yen.

Eurozone investors wanting to buy gold saw the price hold steady at €1367 per ounce, a level first touched in September 2011 that's now 1.4% below last week's new all-time record.

By Adrian Ash
BullionVault.com

Gold price chart, no delay   |   Buy gold online at live prices

Formerly 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 2012

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.


© 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