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

Soros Says Gold's Safe-Haven Status Is "Destroyed"

Commodities / Gold and Silver 2013 Apr 08, 2013 - 02:42 PM GMT

By: Adrian_Ash

Commodities

The GOLD PRICE ticked lower against the US Dollar early Monday, but held onto the bulk of Friday's sharp rally at $1577 per ounce as world stock markets rose alongside commodities.

Silver bullion traded at $27.30 per ounce, some 2.5% above last week's 9-month low, while both Sterling and the Euro extended their gains versus the US currency, pushing the gold price below £1030 and €1215 per ounce respectively.


Major-government bond prices eased back, but Portugal's 10-year borrowing costs nudged up to 6.40% after a court in Lisbon today rejected a plan to suspend state-salary and pension payments for one month.

Prime minister Pedro Passos Coelho responded by vowing a new round of spending cuts as he seeks to meet the terms of 2011's bailout by Eurozone partners, the International Monetary Fund and the European Central Bank worth €78 billion.

Head of the IMF Christine Lagarde today called the Bank of Japan's new $1.4 trillion program of quantitative easing "a welcome step".

What one Japanese fund manager calls Tokyo's "bazooka" has seen the Nikkei stock index rise 9.9% over the last four sessions.

"[Gold] has disappointed the public," says currency speculator and hedge-fund manager George Soros, speaking to the South China Morning Post, "because it is meant to be the ultimate safe haven.

"But when the Euro was close to collapsing in the last year...gold was destroyed as a safe haven, proved to be unsafe...Gold is very volatile on a day-to-day basis [with] no trend on a longer-term basis."

Daily volatility in the US Dollar gold price has averaged less than 20% over the last 5 years. The S&P stock-market index shows average volatility of 21%.

Soros called gold "the ultimate bubble" in February 2010. Rising 75% over the following 18 months, its price stands more than 43% higher today.

"There is still strong physical demand with the gold price below $1600," says the latest Commodities Quarterly from Standard Bank's analysts, pointing to their Gold Physical Flow index, which remains well above both the 2012 and four-year average levels for the year so far.

Trimming their 2013 average forecast from $1720 per ounce to $1700, "We still view the two dominant drivers for gold as real interest rates and global liquidity," the Standard Bank team go on, noting a near-2% rise in central bank reserves worldwide year on year.

"Our supply and demand forecast implies [a] tight [market] as well as a decline in supply in the long term."

Looking at the price charts, however, "Gold is still in a bearish trend," says Friday's note from technical analysts at bullion bank Scotia Mocatta, "with support at the base of the massive 18-month consolidation pattern, in the $1522 area.

"Should we break through, it will open up a move to the $1300 level."

Looking at positioning by professional money-managers and speculators in gold futures, "Much of the downside is already priced in," reckons a note from Credit Suisse this morning.

What analysts call the "net long" position of non-industry players in US gold derivatives was little changed at the equivalent of 415 tonnes in the week-ending last Tuesday, new data from US commodity futures regulators said late Friday.

That compares with a 5-year average of more than 700 tonnes equivalent, and is 60% smaller than the peak hit in August 2011.

As a group, so-called "small speculators" – meaning mostly private traders rather than hedge funds or other managed accounts – now hold fewer than 1.7 bullish contracts for every bet they hold that the gold price will fall.

That compares to a 5-year average of 2.3 and a peak of 3.9 in September 2012.

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 2013

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