Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Stock Market Dow Elliott Wave Analysis Forecast - 13th Oct 19
The Most Successful IPOs Have This One Thing in Common - 13th Oct 19
Precious Metals & Stock Market VIX Are Set To Launch Dramatically Higher - 13th Oct 19
Discovery Sport EGR Valve Gasket Problems - Land Rover Dealer Fix - 13th Oct 19
Stock Market US Presidential Cycle - Video - 12th Oct 19
Social Security Is Screwing Millennials - 12th Oct 19
Gold Gifts Traders With Another Rotation Below $1500 - 12th Oct 19
US Dollar Index Trend Analysis - 11th Oct 19
China Golden Week Sales Exceed Expectations - 11th Oct 19
Stock Market Short-term Consolidation Does Not change Secular Bullish Trend - 11th Oct 19
The Allure of Upswings in Silver Mining Stocks - 11th Oct 19
US Housing Market 2018-2019 and 2006-2007: Similarities & Differences - 11th Oct 19
Now Is the Time to Load Up on 5G Stocks - 11th Oct 19
Why the Law Can’t Protect Your Money - 11th Oct 19
Will Miami be the First U.S. Real Estate Bubble to Burst? - 11th Oct 19
How Online Casinos Maximise Profits - 11th Oct 19
3 Tips for Picking Junior Gold Stocks - 10th Oct 19
How Does Inflation Affect Exchange Rates? - 10th Oct 19
This Is the Best Time to Load Up on These 3 Value Stocks - 10th Oct 19
What Makes this Gold Market Rally Different From All Others - 10th Oct 19
Stock Market US Presidential Cycle - 9th Oct 19
The IPO Market Is Nowhere Near a Bubble - 9th Oct 19
US Stock Markets Trade Sideways – Waiting on News/Guidance  - 9th Oct 19
Amazon Selling Fake Hard Drives - 4tb WD Blue - How to Check Your Drive is Genuine  - 9th Oct 19
Whatever Happened to Philippines Debt Slavery?  - 9th Oct 19
Gold in the Negative Real Interest Rates Environment - 9th Oct 19
The Later United States Empire - 9th Oct 19
Gold It’s All About Real Interest Rates Not the US Dollar - 8th Oct 19
A Trump Impeachment Would Cause The Stock Market To Rally - 8th Oct 19
The Benefits of Applying for Online Loans - 8th Oct 19
Is There Life Left In Cannabis - 8th Oct 19
Yield Curve Inversion Current State - 7th Oct 19
Silver Is Cheap – And Getting Cheaper - 7th Oct 19
Stock Market Back to Neutral - 7th Oct 19
Free Market Capitalism: Laughably Predictable - 7th Oct 19
Four Fundamental Reasons to Buy Gold and Silver - 7th Oct 19
Gold and Silver Taking a Breather - 7th Oct 19
Check Engine Warning Light ECU Dealer Diagnostic Cost - Land Rover Discovery Sport - 6th Oct 19
Natural Gas Reloads For Another Price Rally - 6th Oct 19
Understanding and Purchasing different types of Plastic Building Materials Online - 6th Oct 19
Craig Hemke: Ignore the Elliott Wave “Buffoons” Calling for a Gold Crash - 6th Oct 19
Stock Market 6 Month Trend Forecast Conclusion - Video - 6th Oct 19
The True Causes Behind the Yield Curve Inversion and Gold - 5th Oct 19
Strategies on how to be a Successful CFD Trader - 5th Oct 19
Gold Stocks Correction Underway - 5th Oct 19
Climate Change When the Levee Breaks - 5th Oct 19
Federal Reserve Bank ‘Guarantees’ Dow Will Not Sink Below 26k - 5th Oct 19
The Russell and Transportation Tell A Completely Different Stock Market Story - 4th Oct 19
Confidence Drives the Economy and Trump’s Trade War Is Killing It - 4th Oct 19
ADL Predicts Crude Oil Prices Will Fall Below $40 - 4th Oct 19
Investing Money? Why You Need a Reputable Accountant - 4th Oct 19
Stumbling Manufacturing and Rising Gold – Now or Later? - 4th Oct 19
Silver Eyes Fourth Quarter Rebound - 4th Oct 19
Gold Price Forecast to Exceed $10,000/Ounce - 3rd Oct 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast Oct - Dec 2019 by Nadeem Walayat

Gold in Tight Range Head of US Economic Data

Commodities / Gold & Silver Mar 05, 2008 - 09:55 AM GMT

By: Adrian_Ash

Commodities THE SPOT PRICE OF GOLD held in a tight $6 range early in London on Wednesday, trading 0.8% above last night's three-session low as Asian stock markets closed lower for the fifth day running and US bond prices rose ahead of a raft of economic data.


Economists expect the ADP Employment Report for February to show the slowest growth in private-sector jobs since 2003, a survey by Bloomberg News shows.

The data-fest then continues with Mortgage Applications for the week-ending Feb. 29th (last seen 19.2% lower), non-farm Productivity, unit labor costs, January factory orders and finally the Federal Reserve's Beige Book of economic stats and analysis at 14:00 EST.

" Gold is, in principle, the Dollar's counterpart," writes Arne Lohmann Rasmussen, senior analyst in Copenhagen for Danske Bank in the group's latest Commodities Monthly .

"[So] the US central bank signaling lower rates...and explicitly warning that a number of smaller US banks risk going out of business, adds up to just about the best recommendation gold can have.

"We expect Gold Prices will break through the magical $1,000 per ounce mark, and that the peak may be as high as $1,200 in 2008."

Rasmussen also expects silver prices to continue rising, "but not to the same extent" because gold remains the world's No.1 monetary metal.

"In a tumultuous situation such as the present, the only thing that sparkles for investors is Gold."

Ahead of Thursday's interest-rate decision from the European Central Bank in Frankfurt , the European single currency meantime dipped towards a one-week low beneath $1.5150 after José Manuel Barroso – the European Commission president – said the surging currency "is a matter of concern in some sectors of our economy.

"It is now at a level that raises some concerns."

On Monday night the finance ministers of all 15 Eurozone nations issued a joint saying they "are concerned about exchange rate moves...We don't think the recent moves are reflecting economic fundamentals."

But George Alogoskoufis, the Greek finance minister, denied this morning that his political colleagues have discussed "applying pressure" on the ECB to cut rates or intervene in the forex markets.

The British Pound fell more sharply this morning, dropping to a six-session low of $1.9725 ahead of tomorrow's interest-rate vote at the Bank of England on news that UK consumer confidence fell last month, even as High Street prices rose unexpectedly.

US crude oil futures held just above $100 per barrel this morning, while base metals fell and soft commodities were mixed.

The FTSE100 stock index managed to recover all of Tuesday's losses by lunchtime in London , helping push British gilt yields higher as bond prices fell. That move was outpaced by German bunds, however, which fell sharply across the board after the PMI services report for Feb. showed faster-than-expected growth in Europe 's largest economy.

The Dax index of German stocks, currently 19% below the start of the year, added 1.5% as two-year bund yields rose four basis points to 3.24% – more than twice the rate offered by comparable "safe haven" US Treasury bonds, bouyed this morning by Ben Bernanke calling for US mortgage lenders to start writing off their sub-prime loans.

"A recent estimate based on subprime [US] mortgages foreclosed in the fourth quarter of 2007 indicated that total losses exceeded 50% of the principal balance," said Federal Reserve chairman Ben Bernanke at the Independent Community Bankers convention in Orlando, Florida yesterday.

"Legal, sales, and maintenance expenses alone amounting to more than 10% of principal," he went on, before urging mortgage lenders to consider that when a mortgage is "under water" – and suffering the negative equity of outweighing the property's market value – "a reduction in principal may increase the expected payoff by reducing the risk of default and foreclosure."

Meantime in China , in contrast, prime minister Wen Jiabao today told the National People's Congress in Beijing that excessive growth and soaring commodity-price inflation are now his dominant concerns.

"Financial controls need to be strengthened, and the excessively fast growth in money supply and lending should be curbed," Wen told the 3,000 politicians gathered together for his two-hour speech.

The Chinese central bank is now expected to hike its key lending rates for the seventh time in a year in a bid to cap inflation in the cost of living at 4.8%. The People's Bank of China also wants to curb growth in the nation's money supply at "only" 15% per year, down from the current 18% plus.

"Super-high oil, agriculturals and industrial metals will keep headline inflation risks to the upside," says John Reade, head of precious metals at UBS. "Growth is noticeably slowing and banks' balance sheet worries are unlikely to disappear soon.

Raising his near-term targets for the Gold Price to $1,025 per ounce by early April, Reade repeats his view that "fundamental support for gold lies between $700 and $750...Yet gold stubbornly refuses to correct despite occasional periods of Dollar strength, crude softness and the waxing and waning of risk appetite.

"This is not a table-banging recommendation to Buy Gold [but] the balance of arguments favors a move to the upside."

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

© 2005-2019 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

6 Critical Money Making Rules