Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20
The Growing Weaponization of Space - 14th Feb 20
Will the 2020s Be Good or Bad for the Gold Market? - 14th Feb 20
Predictive Modeling Suggests Gold Price Will Break Above $1650 Within 15~30 Days - 14th Feb 20
UK Coronavirus COVID-19 Infections and Deaths Trend Forecast 2020 - 14th Feb 20
Coronavirus, Powell and Gold - 14th Feb 20
How the Corona Virus is Affecting Global Stock Markets - 14th Feb 20
British Pound GBP Trend and Elliott Wave Analysis - 13th Feb 20
Owning and Driving a Land Rover Discovery Sport in 2020 - 2 YEAR Review - 13th Feb 20
Shipping Rates Plunge, Commodities and Stocks May Follow - 13th Feb 20
Powell says Fed will aggressively use QE to fight next recession - 13th Feb 20
PALLADIUM - THIS Is What a Run on the Bank for Precious Metals Looks Like… - 13th Feb 20
Bitcoin: "Is it too late to get in?" Get Answers Now - 13th Feb 20
China Coronavirus Infections Soar by 1/3rd to 60,000, Deaths Jump to 1,367 - 13th Feb 20
Crude Oil Price Action – Like a Coiled Spring Already? - 13th Feb 20
China Under Reporting Coronavirus COVID-19 Infections, Africa and South America Hidden Outbreaks - 12th Feb 20
Will USD X Decline About to Trigger Precious Metals Rally - 12th Feb 20
Copper Market is a Coiled Spring - 12th Feb 20
Dow Theory Stock Market Warning from the Utilities Index - 12th Feb 20
How to Get Virgin Media Engineers to FIX Hub 3.0 Problems and NOT BS Customers - 12th Feb 20
China Under Reporting Coronavirus COVID-19 Infections by 66% Due to Capacity Constraints - 12th Feb 20
Is Coronavirus the Black Swan That Takes Gold To-Da-Moon? - 12th Feb 20
Stock Market 2020 – A Close Look At What To Expect - 12th Feb 20
IBM AI Mega-trend Tech Stocks Investing 2020 - 11th Feb 20
The US Dollar’s Subtle Message for Gold - 11th Feb 20
What All To Do Before Opening A Bank Account For Your Business - 11th Feb 20
How and When to Enter Day Trades & Swing Trade For Maximum Gains - 11th Feb 20
The Great Stock Market Dichotomy - 11th Feb 20
Stock Market Sector Rotation Should Peak Within 60+ Days – Part II - 11th Feb 20
CoronaVirus Pandemic Stocks Bear Market Risk 2020? - Video - 11th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold Tumbles 2.6% Prompting Analysts Line Up

Commodities / Gold and Silver 2013 Dec 03, 2013 - 03:25 PM GMT

By: Adrian_Ash

Commodities

WHOLESALE gold trimmed Monday's 2.6% loss in Asian and London trade Tuesday morning, with a brief rally to $1226 per ounce as world stock markets fell after Wall Street retreated from record highs.

Gold priced in Euros dropped through €900 per ounce for the first time since July 2010.

Silver failed to match the Dollar gold rally, hitting a new 5-month low of $19.09 per ounce.


"The wheels seem to be coming off the gold market," says one US broker's note.

"The yellow metal is at stake of loosing its grip in the run-up to year-end," says a separate note from a London market-maker's trading desk.

"Our flow is dominated by sellers across the board. Producers, funds, [high-net worth individuals] and ETFs all are selling gold in anticipation of the Fed tapering as early as Dec. 18."

Maintaining their holdings even as the gold price fell 2.6% on Monday, the two largest US exchange-traded gold trust funds have so far shed one third of the bullion backing their shares in 2013, shrinking to the smallest level since Feb.2009.

"We have no doubt that gold is in a bear market," says the commodities team at Swiss investment bank Credit Suisse, repeating the view it first gave in February's End of an Era report.

"Financial bubbles tend to unwind faster than they inflate," the bank's analysts write in Gold: Decline & Fall.

"If gold were to continue to retreat along its current trajectory, the metal would be trading close to $900 per ounce by the end of 2014."

"Regardless of the precise timing," agrees French bank and London bullion market maker Societe Generale, forecasting an average gold price of $1050 in the final 3 months of 2014, "underpinning our negative view towards gold is that the ultraloose stance of monetary policy is gradually unwound."

Swiss investment bank and London market maker UBS yesterday cut its average 2014 forecast to $1200 per ounce from $1325, also pointing to a tightening of US monetary policy.

A drop to $1050 could signal a "decent buying level", says UBS analyst Joni Teves. But while "physical buyers are expected to provide some support at the lower levels, this is unlikely to be enough to fully offset the selling."

"Strong Chinese gold imports are being overpowered," agrees Bart Melek at TD Securities in Toronto, "by sharply lower ETF demand."

The Canadian bank's analyst also cites "worries expressed by highly leveraged speculative investors that the 14,700 tonnes of vaulted gold since 2002 may start hitting the market once real Treasury [bond interest] rates move materially higher."

Latest data from US regulator the CFTC yesterday showed speculative traders such as hedge funds raising their bearish betting on gold to a 4-month high in the week-ending last Tuesday.

Net of those bearish bets, the so-called "Large Speculators" net bullish position in gold futures and options fell to 162 tonnes equivalent.

That compares to the 3-year average of 497 tonnes.

Smaller speculators trading gold on leverage through futures and options meantime cut their net bullishness last week to just 6 tonnes equivalent – the lowest level since early July's negative reading.

Dollar gold was then half-way through a 21% rally from 3-year lows.

Private investors choosing to trade physical gold, in contrast, last month maintained their positive sentiment near a 6-month high says Bloomberg today, citing the latest Gold Investor Index from BullionVault.

Amongst money managers, however, "Gold ETF holdings have failed to stabilise" after the spring collapse says Barclays.

"Not really an attractive asset class at this stage," said Mark Konyn, CEO of Cathay Conning Asset Management – part of the $83 billion Conning group – to CNBC overnight.

Noting the drop in India's formerly world-leading demand as anti-import rules hit in 2013, "The [investment] case for gold is an inflation hedge," says Konyn. "But where's the inflation globally?"

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

© 2005-2019 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