Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
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
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Turns Higher After Profit Taking Earlier in the Week

Commodities / Gold & Silver Feb 13, 2008 - 08:07 AM GMT

By: Adrian_Ash

Commodities SPOT GOLD PRICES turned higher from this week's 3.3% drop to $897.25 per ounce early Wednesday as European equity markets slipped on news that Eurozone industrial output fell in December.

With Treasury bond prices ticking higher – and London 's FTSE stock index losing 1% for the day – US crude oil futures pushed higher above $92 per barrel.


Copper prices fell at the London Metal Exchange to cap a five-day winning run, while wheat fell back from its sharpest two-day gains since 2003.

Soybean and palm oil hit new all-time highs at the Dalian exchange in China .

"Subject to developments in the oil price and the US Dollar," says Wolfgang Wrzesniok-Rossbach for Heraeus, the German refining group based in Hanau , "we do not rule out [the possibility] that gold has seen its highs for the time being.

"The failed attempt on Monday to reach the most recent peak again could disenchant investors and initially lead to further profit-taking."

But with G7 politicians urging gold sales by the International Monetary Fund (IMF) – and a leftist candidate for the Economic Ministry in Hesse , Germany , now calling for the Bundesbank to follow – "private investors continue to remain on the other side," Wrzesniok-Rossbach adds.

"Demand for investment-gold remained robust this week [despite] more and more profit-taking from private investors happy to book gains at these levels."

Gold futures traded today at the Tocom in Tokyo dropped 2.6% today to equal $902.85 per ounce for Dec. '08 delivery. Recording an AM Fix in London of $905.75 per ounce – some 1.6% below Tuesday morning's Fix – physical Gold also lost 2.4% against the Pound Sterling, despite news that growth in UK earnings has slowed below inflation.

Today brings US retail sales figures for Jan. – expected to show a 0.2% decline – plus the latest US mortgage application data.

The default rate on all existing US mortgages has now reached 7.3%, says the Mortgage Bankers Association, the highest level on record. President Bush will this afternoon sign a $168 billion tax-rebate bill, hoping to stop the current slowdown from becoming a genuine economic slump.

"It certainly will be possible for the Gold Price to spike still higher," reckons David Moore at the Commonwealth Bank of Australia in Sydney . "I think it's premature to say that we've seen the peak. There's still some investor interest in gold."

The latest data on Gold Market futures & options show that, overall, bullish betting shrank 1.3% in the week-ending Feb. 5th. The world's gold-backed trust funds meantime grew by 0.3% – and that makes the volume of metal represented by the ETFs greater than the net long US derivatives position, says Mitsui today.

The switch indicates "how important these investment vehicles are in the sustainability of the gold run," the metals dealer adds. ( But wouldn't you rather actually own real gold instead? Get the facts in this Free Gold Report here... )

Meantime in the market for real physical Gold Bullion today, the early drop below $900 per ounce encouraged inventory buying from Asian jewelers, reports Reuters.

India 's gold imports slumped by 95% in January from the same month in 2007, the Bombay Bullion Association said Tuesday. But while "gold buyers may take long time to adjust to the high and volatile prices," says Rajiv Nair, vice president of Vision Commodities in Dubai , "by the second half of 2008, demand will pick up."

In the fast-growing Middle East , meantime, "jewelry demand is likely to remain stable, but we are now seeing a surge in investment demand due to growing apprehension in the global financial markets," said Ian MacDonald, head of gold and precious metals at the state-owned Dubai Multi Commodities Centre, to the Kuwait Times overnight.

Inflation in Saudi Arabia , the largest economy in the Middle East , rose to 4.1% last year from 2.2% in 2006, driven by a 7% rise in food prices and an 8% increase in housing costs.

Gold demand across the member states of the Gulf Cooperation Council (GCC) rose by one-fifth in 2007 to reach 260 tonnes according to the World Gold Council's local office.

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