Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
S&P SEASONAL ANALYSIS - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
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

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Boom Sees Gold Down 25% in 2013

Commodities / Gold and Silver 2013 Nov 22, 2013 - 03:01 PM GMT

By: Adrian_Ash

Commodities

FOUR-MONTH lows in gold continued vs. the Dollar and Euro in London on Friday, with the metal heading for its lowest weekly finish in British Pounds since early August 2010.

World stock markets rose meantime, extending 2013's 30% gain on the MSCI index, as did commodities and government bond prices, after the Dow Jones index in New York ended last night above 16,000 for the first time.


"People are finding it hard to find a reason to own gold," the Wall Street Journal quotes one analyst today.

"Precious metals markets," says David Govett at brokers Marex Spectron, also speaking to the WSJ, "are out of favor with investors and set to stay that way,"

Silver tracked gold's Dollar-price drop of 3.6% to $1245 this week, failing to hold a rally above $20 per ounce lunchtime Friday.

Averaging 14% annual gains since 1999, the Sterling gold price has so far dropped 25% in 2013, dipping below £770 per ounce overnight.

New data from the International Monetary Fund meantime showed central banks as a group adding slightly to their gold reserves in October.

Turkey led the rise, with nearly 13 tonnes being added – most likely by commercial banks putting more client property on deposit, as part of their liquidity reserves – to the country's previous holdings of 491.

Germany sold 3.4 tonnes from its 3,391 reserves, again for production of gold coin.

The United States added 33 kilograms, the largest change to its world-leading 8,133-tonne hoard since the 840kg added in the third quarter of 2012.

"Our bullish view has proven incorrect," said Bank of America-Merrill Lynch technical strategist MacNeil Curry on Thursday, pointing to the drop through $1251 per ounce.

Whilst $1270 will now "limit the topside," his chart analysis says, "bears need a break [below] $1155 and $1087 to confirm a long-term top and secular turn in trend from bullish to bearish."

Targeting averaging prices of $1150 per ounce across the second quarter of 2014, TD Securities' analyst Mike Dragosits says "Spec positioning" in the futures market "could also precipitate an overshoot, with gold hitting sub-$1000/oz on an intraday basis."

Speculative traders in the US gold futures market have this year built the biggest "short" bet against prices since the bear-market lows of 1999.

"We will continue to watch Comex specs activity as a major contributing driver for this move," says TD's note.

Gold prices in India, formerly the world's No.1 consumer but now overtaken by China, pushed higher above international benchmarks Friday, reports Reuters.

"Premiums are still on the higher side at about $120 per ounce," the newswire quotes All India Gems & Jewellery Federation chairman Haresh Soni.

Thanks to the Indian government's strict anti-gold import rules, aimed at cutting the country's large trade deficit, "Still there is scarcity of gold," Soni adds. "This problem will continue for another 5-6 months till the elections."

Physical gold will meantime be traded between China's biggest banks in formal "swaps" contracts starting Monday, the National Interbank Funding Center said today.

Used by large gold owners and traders to raise cash, and with a small rate of interest typically offered to borrowers as an incentive, gold swaps hit the headlines in 2010 after European central banks were identified as the source of 349 tonnes swapped with the Bank for International Settlements during the 1st half of the year, raising cash amid the growing Eurozone debt crisis.

Announcing a raft of reforms this week after the 3rd plenum of the current politburo, policymakers in Beijing have put China's gold-market liberalization at the heart of financial deregulation.

US derivatives exchange the CME yesterday cut the margin payments needed to trade gold and silver futures contracts, halving the sharp hike made in June as prices ended their worst quarterly drop in three decades.

By Adrian Ash
BullionVault.com

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

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich, Switzerland for just 0.5% commission.

(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