Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Gold Mining Stocks Fail to Keep Pace With New Gold High

Commodities / Gold & Silver Feb 22, 2008 - 01:18 PM GMT

By: Adrian_Ash

Commodities SPOT GOLD PRICES held inside a $7 range in London early Friday, recording a new all-time high the AM Fix of $945.75 per ounce as Asian and European equities reversed this week's gains and the US Dollar fell to a 10-session low.

"It's been six months this week since the Fed started cutting interest rates – and gold has gone nuts," as BullionVault told Bloomberg earlier today.

"Over that time, the Gold Market has risen 20 weeks out of 27 – and the more the Fed promises cheaper money, the more people will choose an alternative to the Dollar."

Crude oil bounced higher today on news that 10,000 Turkish troops moved into northern Iraq overnight to challenge Kurdish PKK rebels.

WTI April futures had lost 4.2% from Wednesday's record top of $101.32 per barrel, but "demand from India and China is still booming even at these prices," says Rob Laughlin at MF Global in London, "and appears at present to offset any slowdown from the western credit crunch."

In Asia soybean and palm cooking oils reached yet more record highs, while copper added to this year's 25% gains-to-date on news that global stockpiles of the metal have shrunk to a 16-month low.

Wheat prices also rose against the Dollar, which has now lost 6% of its trade-weighted value on the currency markets since the Fed began slashing its key lending rates six months ago.

The Dollar fell today to a three-week low against the European single currency of $1.4850 per Euro, and that capped the Gold Price in Euros below €639 per ounce.

For British investors wanting to Buy Gold today the metal traded 1.2% below Thursday's new all-time record of £486 per ounce. Japanese gold futures slipped 0.8% to equal $951.30 for Dec. delivery, while the Nikkei stock index recorded its sixth losing week of 2008 so far, closing Tokyo down 122 points from last Friday at 13,500.

Here in London, Lloyds TSB bucked the trend in financial stocks to gain 4.3% by lunchtime as it raised its 2007 dividend and restated just how boring and uniquely free from subprime junk its balance sheet really is.

Over in Frankfurt the German Dax stood 1.2% lower on news that European manufacturing orders sank 3.6% in December. The Eurostat data agency also said French consumer spending fell in Jan. at its fastest rate since Sept. 2006.

"The next probable stop in gold is around $955," reckons Pradeep Unni, annalyst at Vision Commodities in Dubai, "and that is likely to be witnessed in the coming days.

Short-term, "$970 and $980 also seem possible," he told Reuters today.

"The momentum is showing no signs of cooling and any pullback will ideally trigger fresh buying interest. The risk is quite high at such high levels, but as long as gold trades above the $930 level, a major slide is unlikely."

On the supply side, meantime, Thursday brought a raft of results from the world's biggest gold mining companies. But as spot Gold Prices raced to new all-time highs, US gold stocks managed a mixed performance at best.

The world's very largest gold mining company, Barrick Mining, rose 0.4% after beating Wall Street's earning-per-share forecast by 1¢ at 57 cents. The world No.2, Newmont Mining, lost almost 1% despite beating EPS forecasts by 10¢ at 51 cents per share.

Goldcorp, still enjoying the lowest costs of any million-ounce gold miner, rose 3.2% as it reported earnings of 25¢ per share, ahead of the 18 cents forecast. But for the day as a whole, the HUI gold bugs index of 15 major gold-mining stocks ticked 0.1% lower to finish unchanged from this time last month.

Physical Gold Bullion , in contrast, has gained 6.7%. And looking ahead, the ongoing problems of lower output, soaring costs and shrinking gold reserves could dog the gold mining industry for years to come, warns Tom Winmill, president of Midas Management Corp. and manager of nearly $300 million.

"Newmont Mining will probably see a decline in output from 5.3 to 5.1 million ounces in 2008," he told Bloomberg on Thursday, "and then probably decline again until 2011.

"Newmont has a lot of leverage to the Gold Price [and] we're confident the new CEO Richard O'Brien will bring new efficiencies to the business. But there's a lot of investor fatigue. Gold has been in a bull market for six years.

"Where has Newmont been? Nowhere."

By Adrian Ash

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 , 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 - 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