Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
US Economy Has Been in an Economic Depression Since 2008 - 22nd Oct 21
Extreme Ratios Point to Gold and Silver Price Readjustments - 22nd Oct 21
Bitcoin $100K or Ethereum $10K—which happens first? - 22nd Oct 21
This Isn’t Sci-Fi: How AI Is About To Disrupt This $11 Trillion Industry - 22nd Oct 21
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Analysts Turn Bullish as Price Regains 40% of June Slump

Commodities / Gold and Silver 2013 Jul 02, 2013 - 01:12 PM GMT

By: Adrian_Ash

Commodities

The PRICE of GOLD rose in Asia and jumped at the start of London trade Tuesday, hitting $1267 per ounce to recover 40% of last month's crash before easing back.

Prices for silver bullion also rose, but lagged gold's rate of gain, before slipping back below last week's finish at $19.69 per ounce.


European stock markets meantime fell, as did the Euro – down 0.5¢ against the Dollar – after Eurozone and IMF officials said Greece has just three days to prove its commitment to fresh budget cuts.

Prices to buy gold with Euros touched €970 per ounce, a near 1-week high more than 7% above last week's 34-month low.

"We expect gold to trade with a positive bias going ahead," says a technical analysis of the gold chart from Sharekhan, India's second largest stock broker.

"The crucial support is placed at $1180," says Sharekhan, "which is the low it touched" at the end of June.

"Friday's multi-year low of $1180 looks like a bad quarter-end liquidation memory," agrees Canadian bank and London bullion market-maker ScotiaMocatta.

On a technical analysis, "[Monday's] higher close confirms Friday's bullish hammer reversal warning on the daily chart," says Scotia.

Last week's record-large number of bearish contracts held by speculative traders in US gold futures also "leaves gold open to a more sustained short covering" as they scramble to close their positions at rising prices, says fellow London market-maker HSBC.

"[This Thursday's] 4th of July holidays in the US also make it likely the gold markets will be relatively thin," HSBC adds. "This could all contribute to a rally."

After advising clients to sell gold in January, "At this time we believe gold and gold miners represent good risk/reward," says Carter Worth, managing director and chief market technician at Oppenheimer Asset Management Inc., which currently runs some $9 billion in client money.

"Indeed, the recent extreme weakness is judged to be the reciprocal...of the extreme strength witnessed in the summer of 2011. The 'despair' relating to gold now is as palpable as 'euphoria' then."

Urging "immediate action" on Monday, investment and bullion bank J.P.Morgan told clients to "go overweight" on commodities – a call last made in October 2010 – because "consumers are likely already starting to act on the 20%+ swoon" in natural resources prices.

"Price-driven involuntary production cuts in crude oil, copper, and gold" should also help buoy prices, says J.P.Morgan.

Bank of America agrees, noting today that "Around one-third of the gold mining industry does not cover 'all-in' cash production costs."

But while "in the long term [mining problems] will provide big support," says $2.2 billion fund manager Charlie Morris at HSBC Global Asset Management in London, "in the short term it won't really make any difference at all.

"I'm still bullish [on gold prices] long term, but I just think we've got a big nasty bear market in the meantime."

"Even if gold were to bottom off its current lows," adds a note from brokers Jefferies Bache, "we believe gold equities face further downside.

"Gold mining is a very challenging and high risk business."

Looking at the classical commodity-price cycle, falling prices to buy gold mean "New mines will be put on hold, old mines closed, some permanently, exploration will dwindle," writes Lawrie Williams at MineWeb.

"Global gold production will fall, shortages will develop and then prices will be ultimately forced up dramatically...Such is the cyclical nature of the global mining sector."

Western households choosing to buy investment gold in June again outnumbered sellers, according to BullionVault's latest Gold Investor Index, and also by the same proportion as in May.

Over in Asia today, gold demand was "strong" amongst wholesale dealers said traders on Tuesday morning. But the pace of purchasing "is not on the scale we saw in April," Bloomberg quotes Citics Futures Co. analyst Huang Fulong.

"The recent short-covering rally [in US gold futures] is expected to continue," says Huang, "before the US holiday and payrolls data later this week."

After Thursday's Independence Day holiday, Friday will bring US jobs data for June.

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

© 2005-2019 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