Best of the Week
Most Popular
1.Crude Oil Price Trend Forecast 2016 Implications for Stock Market - Nadeem_Walayat
2.Odds of Winning Walkers Crisps Spell & Go olidays K, C and D Letters - Sami_Walayat
3.Massive Silver Price Rally During The Coming US Dollar Collapse - Hubert_Moolman
4.Pope Francis Calls For Worldwide Communist Government - Jeff_Berwick
5.EU Referendum Opinion Polls Neck and Neck Despite Operation Fear, Support BrExit Campaign - Nadeem_Walayat
6.David Morgan: There Will Soon Be a Run to Gold Like You've Never Seen Before - Mike Gleason
7.British Pound Soars on BrExit Hopes Despite Remain Establishment Fear Mongering - Nadeem_Walayat
8.Gold Price Possible $200 Rally - Bob_Loukas
9.The Federal Reserve is Not Going To Raise Interest Rates and Destroy Gold - Michael_Swanson
10.Silver Miners’ Q1’ 2016 Fundamentals - Zeal_LLC
Free Silver
Last 7 days
It Feels Like Inflation - 26th May 16
Negative Interest Rates Set to Propel the Dow Jones to the Stratosphere? - 26th May 16
S&P Significant Low has Occurred – Not Likely! - 26th May 16
Statistics for Funeral Planning in UK Grave - 26th May 16
Think Beyond Oil And Gold: Interview With Mike 'Mish' Shedlock - 26th May 16
Hard Times and False Mainstream Media Narratives - 26th May 16
Will The Swiss Guarantee 75,000 CHF For Every Family? - 26th May 16
Is There A Stocks Bear Market in Progress? - 26th May 16
Billionaires Are Wrong on Gold - 26th May 16
How NOT to Invest in the Gold Market - 26th May 16
The Black Swan Spotter...Which Saw the Oil-Crash coming; now says the “Invisible Hand” will push Brent to $85 by Christmas - 26th May 16
U.S. Household Debt Still Below 2008 Peak - 25th May 16
Brexit: Wrong Discussion, Wrong People, Wrong Arguments - 25th May 16
SPX is at Strong Resistance - 25th May 16
US Dollar, Back From the Grave? - 25th May 16
Gold : Just the Facts Ma’am - 25th May 16
The Worst Urban Crisis in History Could be Upon Us - 24th May 16
Death Crosses Across The Board Are IRREFUTABLE Stock Market Sell Signals - 24th May 16
Bitcoin Trading Alert: Bitcoin Price Stays below $450 - 24th May 16
Stock Market Crash Death Cross Doom Prevails - 23rd May 16
Did AMAT Chirp? Implications for the Economy and Gold - 23rd May 16
Stocks Extended Their Rebound On Friday - Will They Continue Higher? - 23rd May 16
UK Treasury Propaganda Warns of 3.6% Brexit Recession, the £64 Billion Question? - 23rd May 16
Stock Market Support Breached, But Not Broken! - 23rd May 16
George Osborne Warns of 18% Cheaper House Prices - BrExit for First Time Buyers - 22nd May 16
Gold Bull-Phase I Continues to Confound (The Trek to “Known Values”) - 22nd May 16 r
Avoiding a War in Space - 22nd May 16
Will Venezuela Be Forced to Embrace the US Dollar? - 21st May 16
Danish Central Bank Stumbles with Its Currency Peg to the Euro - 21st May 16
SPX Downtrend Underway - 21st May 16
George Osborne Warns of More Affordable UK Housing Market if BrExit Happens - 21st May 16
Gold And Silver 11th Hour: Globalists 10 v People 0 - 21st May 16
David Morgan: There Will Soon Be a Run to Gold Like You've Never Seen Before - 21st May 16
Gold Stocks Following Bull Analogs - 20th May 16
The Gold Chart That Has Central Banks Extremely Worried - 20th May 16
Silver Miners’ Q1’ 2016 Fundamentals - 20th May 16
Stock Market Rally At the End of the Road? - 20th May 16
British Pound Soars on BrExit Hopes Despite Remain Establishment Fear Mongering - 20th May 16
NASDAQ 100, FTSE, and British Pound - When Rare Market Data Screams, Listen  - 20th May 16
Unintended Consequences, Part 1: Easy Money = Overcapacity = Deflation - 19th May 16
The Federal Reserve is Not Going To Raise Interest Rates and Destroy Gold - 19th May 16
Stock Market Final Supports Are Broken - 19th May 16
Gold - Pro-Inflation? Anti-USD? - 19th May 16
Further Stock Market Uncertainty As Indexes Gained On Friday, Will Uptrend Resume? - 19th May 16
What This U.S. Presidential Election Tells Us About Her Millennial Generation - 18th May 16
Stock Market Trendline Broken on Fed Announcement - 18th May 16
An Incredibly Simple, Rarely Used Way to Book 170% Investing Gains - 18th May 16
Statistically Significant Stock Market Death Cross? - 18th May 16
Precisely Wrong on US Dollar, Gold? - 18th May 16
What You Can Gain From One Tech CEO's $355 Million Loss - 18th May 16
The ‘Tide’ has turned… NEGATIVE For STOCKS!!! - 18th May 16
Goldman Sachs's - Regulatory Climate is Chilling Deals; Hatzius Not Worried About a Recession - 18th May 16
Bitcoin Price Remains above $450 - 18th May 16
Crude Oil Price Trend Forecast 2016 Implications for Stock Market - 17 May 16
Could the National Debt Really Grow as High as $31 Trillion by 2023? - 17 May 16
Gold Price Possible $200 Rally - 17 May 16
Crisis Investing - Jim Rogers on “Buying Panic” - 17 May 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Why 95% of Traders Fail

Gold and Silver Enter "Summer Lull", Will Miss "Commodity Supercycle" Says SocGen

Commodities / Gold and Silver 2013 Jul 08, 2013 - 03:38 PM GMT

By: Adrian_Ash

Commodities

The GOLD PRICE ticked higher in London trade Monday morning, rising from its lowest weekly close in three years as Asian stock markets fell but Eurozone shares jumped over 2% higher.
 
Major government bonds ticked higher, easing interest rates down, while the US Dollar held steady after last week's strong gains on the currency market.


A Wall Street Journal survey says the majority of economists think that Friday's jobs data mean the US Federal Reserve will start reducing its quantitative easing program as early as September.

Silver bullion today ticked back above $19.22 per ounce, regaining half of last week's 3.6% drop.

"Unlike the April rout [in gold prices]," says the latest monthly report from brokers INTL FCStone, "which drew out a slew of buyers, we are not seeing the same type of reaction this time around.
 
"[This suggests] the complex remains vulnerable from the physical side as well."
 
The gold price is now "near the lows of the year," says David Govett at fellow brokers Marex Spectron, but "For the moment at least, I do think we have done enough.
 
"I now think we are moving into the good old summer lull. Overall direction will be sideways."
 
New curbs on gold bullion imports to India – where the Hindu calendar's Chaturmas will now keep gold demand low until September – cut legal inflows by 81% in June from May's record high of 162 tonnes, a government official told journalists today.
 
Sales are however "expected to go up again" because of the gold price, the official added.
 
"India's gold imports will be somewhat the same or slightly more for July," agrees Commtrendz Research's Gnanasekar Thiagarajan, quoted by Reuters, "as some bargain hunting interest was seen."
 
The Indian Rupee fell Monday to fresh all-time lows against the Dollar, reducing the gold price discount for buyers in the world's No.1 consumer market.
 
"The [Reserve Bank of India] is definitely concerned about Rupee weakness," says Nick Verdi at Barclays in Singapore.
 
Rather than intervening to support the Rupee with cash trades, however, "It will look to combat this mostly through verbal intervention," he reckons.
 
Meantime in Egypt, the 12th largest private gold consumer in 2012, the main stock market sank almost 3% as fighting continued after more than 40 supporters of ousted president Morsi were killed at the weekend.
 
"Tensions in Egypt put pressure on local [gold] demand," says German refining group Umicore in a quarterly trading update, "as some retailers started to think of closing their shops for fears of looting."
 
With the gold price now 36% below its Dollar record of September 2011, Russia's state treasury Gokhran – the official trader of gems and precious metals – is preparing to buy gold on the domestic market after a two-year gap, Reuters reports.
 
Invited to sell gold onto the open market when prices neared their 2011 peak, "We were forbidden to buy gold directly [from Russian miners]," a source tells the newswire.
 
"If we receive permission, we will be happy to start buying gold again," the source added.
 
Russia's central has continued to acquire gold bullion for its own reserves, adding more than 78 tonnes in the last 12 months and rising to 7th place amongst the largest nation-state holders.
 
Western Europe's central banks, in contrast, have so far sold only 4.3 tonnes of the 400-tonne limit set by their Central Bank Gold Agreement this year.
 
Running from September, the agreement was first signed in 1999 to cap erratic sales by European governments as the gold price sank to three decade lows.
 
"Gold prices are going to generally drop down throughout the year," reckons Société Générale's head of commodities research, Michael Haigh, speaking today at a media briefing in Singapore.
 
Pointing to possible "price hedging" by gold-mining producers, "They'll start selling into the market," Haigh warned, "which puts more downward pressure on gold prices."
 
SocGen's outlook for gold is in stark contrast to its broader view of the commodities "super cycle", which Haigh believes will continue for another 15-20 years thanks to "population and urbanization" in emerging Asian economies.
 
"But it's not going to be an upward price for all."
 
Forecast by many analysts to overtake India as the world's No.1 gold consumer in 2013, China imported its second greatest monthly volume of gold bullion through Hong Kong in May, data showed last week.
 
Through the first 6 months of the year, separate data showed Friday, gold bullion deliveries made to traders using the Shanghai Gold Exchange totalled 1058 tonnes.
 
That was precisely 50% of the 2012 full-year total.
 
The plunging gold price however saw shares in Zijin Mining – the largest gold miner in world No.1 mining nation China – today drop 11% after it forecast "very poor results, below expectations."
 
"The fact that the gold price has fallen is actually going to be very healthy," said gold-mining fund manager Evy Hambro of Blackrock to Bloomberg last week.
 
"We need to see costs taken out of the industry; we need to see the companies stop producing the ounces that don't make money and focusing on the ones that do."

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

© 2005-2016 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

Catching a Falling Financial Knife