Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
AI Mega-trend Tech Stocks Buying Levels Q2 2020 - 1st Jun 20
M2 Velocity Collapses – Could A Bottom In Capital Velocity Be Setting Up? - 1st Jun 20
The Inflation–Deflation Conundrum - 1st Jun 20
AMD 3900XT, 3800XT, 3600XT Refresh Means Zen 3 4000 AMD CPU's Delayed for 5nm Until 2021? - 1st Jun 20
Why Multi-Asset Brokers Like TRADE.com are the Future of Trading - 1st Jun 20
Will Fed‘s Cap On Interest Rates Trigger Gold’s Rally? - 30th May
Is Stock Market Setting Up for a Blow-Off Top? - 29th May 20
Strong Signs In The Mobile Gaming Market - 29th May 20
Last Clap for NHS and Carers, Sheffield UK - 29th May 20
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Gold Traders "Still in Shock" After "Excessive Selloff"

Commodities / Gold and Silver 2013 Apr 17, 2013 - 03:40 PM GMT

By: Ben_Traynor

Commodities

WHOLESALE MARKET gold prices hovered around $1380 an ounce Wednesday morning in London, little changed from a day earlier, as European stocks continues to fall along with most commodities and US Treasuries gained.

Silver hovered around $23.50 an ounce for most of the morning, also little changed from the previous day.


"In truth the gold market is still in shock," one London-based trader said this morning.

"A lot of damage has been done," agrees Dominic Schnider, head of commodities research at UBS Wealth Management.

"[But] if you look at the fundamentals, the drop was excessive and does not correspond to the reality that we still have a lot of troubles out there – debt monetization, real interest rates will remain in negative territory and the Dollar in the long run still is a currency that won't be that strong."

The world's biggest gold exchange traded fund SPDR Gold Trust (ticker: GLD) continued to see outflows yesterday, with the volume of its bullion holding dropping 8.4 tonnes to 1145.9 tonnes, 15% down on where it started the year.

In Asia by contrast, "people are actually buying everything, gold bars, gold coins," says Brian Lan, managing director of Singapore's GoldSilver Central

"People are rushing to get a hand on it...it's the same for silver. So far sentiment seems to be improving. Even the price has more or less stabilized."

Some stores in mainland China, the world's second-biggest gold buying nation, ran out of small gold bars Tuesday, Hong Kong's Standard newspaper reports.

In world number one India however, "we don't see a rush even though the price has come off," one Singapore wholesale dealer told newswire Reuters this morning.

Shares in India's two biggest gold loan companies, Muthoot Finance and Manappuram Finance, saw 10% drops in both Monday and Tuesday trading. Both companies allow people to borrow money posting physical gold as collateral.

"High LTVs [loan-to-value ratios] leave limited cushion for correction in the value of security," says a note from consultancy India Research.

"An additional 10 percent correction in gold prices in the near future could result in a majority of outstanding loan amounts being higher than the realizable value of collateral, resulting in increased possibility of losses."

Manappuram said last month that it expects to lose some of the interest it owes as a result of lower collateral values, expressing particular concern about loans made towards the end of 2011.

Stock markets in Europe meantime extended their losses of the last two days during Wednesday morning's trading, with some money managers suggesting substitution into other territories.

"Fund managers in Europe are switching guns because they are seeing on the one side Japan with positive momentum and Europe just getting deeper and deeper into a recessionary environment," says Didier Duret, chief investment officer at ABN Amro.

The International Monetary Fund yesterday cut its 2013 growth forecast for the Eurozone, projecting a slightly sharper contraction, while also revising down Britain's growth rate.

Cyprus will sell some of its gold during the next few months, the country's finance minister confirmed Wednesday, contrary to an official denial last week.

"The exact details of it will be formulated in due course primarily by the board of the central bank," Haris Georgiades told Bloomberg TV.

Cyprus has 13.9 tonnes of gold, according to the latest World Gold Council figures. The European Commission said last week that the country has committed to selling around €400 million worth of so-called "excess" gold as it tries to raise enough to secure a €10 billion bailout. Since gold's price drop however, Cyprus's entire gold reserve is now worth around €470 million.

The government of Singapore, home to BullionVault's newest vaulting location, is in talks with the Singapore Bullion Market Association about launching a gold fix along the lines of the twice-a-day London Fix, where major bullion banks set a clearing price.

"While nothing concrete has been formed yet, we will continue to work with the SBMA to collate ideas on how to make the Singapore gold hub work for the industry," said a spokesman for International Enterprise Singapore.

By Ben Traynor
BullionVault.com

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

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.(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.

Ben Traynor 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