Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
The Three M's of Hyperinflation : Milosevic, Mugabe, And Maduro - 26th May 19
Global Multi-Market / Asset Charts Review - 26th May 19
An Oil Shock Could Be the Black Swan That Finally Drives Gold Higher - 26th May 19
Brexit Party Forces Theresa May to Resign, Boris Johnson Next Tory Prime Minister? - 26th May 19
IBM - Investing in AI Machine Intelligence Stocks - 25th May 19
Seasonal Dysfunction: Why Generations of Gold and Silver Investors Are Having Such Difficulty - 25th May 19
Employment - The Good and the Bad of Job Automation - 25th May 19
Gold Mining Mid-Tier Stocks Fundamentals - 25th May 19
Buy This Pick-and-Shovel 5G Stock Before It Takes Off - 25th May 19
China Hang Seng Stocks Index Collapses and Commodities - 24th May 19
Costco Corp. (COST): Finding Opportunity in Five Minutes or Less - 24th May 19
How Free Bets Have Impacted the Online Casino Industry - 24th May 19
This Ultimate Formula Will Help You Avoid Dividend Cutting Stocks - 24th May 19
Benefits of a Lottery Online Account - 24th May 19
Technical Analyst: Gold Price Weakness Should Be Short Term - 24th May 19
Silver Price Looking Weaker than Gold - 24th May 19
Nigel Farage's Brexit Party EU Elections Seats Results Forecast - 24th May 19
Powerful Signal from Gold GDX - 24th May 19
Eye Opening Currency Charts – Why Precious Metals Are Falling - 23rd May 19
Netflix Has 175 Days Left to Pull Off a Miracle… or It’s All Over - 23rd May 19
Capitalism Works, Ravenous Capitalism Doesn’t - 23rd May 19
The Euro Is Bidding Its Time: A Reversal at Hand? - 23rd May 19
Gold Demand Rose 7% in Q1 2019. A Launching Pad Higher for Gold? - 23rd May 19
Global Economic Tensions Translate Into Oil Price Volatility - 22nd May 19
The Coming Pension Crisis Is So Big That It’s a Problem for Everyone - 22nd May 19
Crude Oil, Hot Stocks, and Currencies – Markets III - 22nd May 19
The No.1 Energy Stock for 2019 - 22nd May 19
Brexit Party and Lib-Dems Pull Further Away from Labour and Tories in Latest Opinion Polls - 22nd May 19
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Gold Prices Jump on Weakening US Dollar

Commodities / Gold & Silver May 19, 2008 - 10:22 AM GMT

By: Adrian_Ash

Commodities PHYSICAL GOLD BULLION prices rose 1.2% in Asian and early London trade on Monday, reaching a four-week high on what analysts could only call "investment fund buying" in the absence of specific news or financial events.

Nearing the US open above $912 per ounce, Gold rose as Far Eastern equity markets ended the day 0.5% higher on average.


US Treasury bonds also ticked higher, pushing open-market interest rates down as crude oil slipped $2 from last Friday's new record highs near $128 per barrel.

The US Dollar dropped to its lowest level so far in May versus the Euro.

"Gold continues to attract investors because it is a universally accepted currency with Zero Counter-Party Risk ," writes K.K.Foong, a senior research fellow at the Malaysian Institute of Economic Research in The Star today.

"Moreover, potential official reserves diversification [by Asian central banks] and jewelry consumption by Chinese and Indian consumers may account for rising gold demand. Finally, rising costs of gold production may restrict supply and thereby, generating upward pressure on the Gold Price ."

So far in this decade's bull market in gold, notes David Galland of Casey Research, gold miners have found only one large " Elephant Gold Deposit ".

That means the big mining companies cannot replace the below-ground gold reserves they're digging up, hampering their stock price and capping long-term supplies. ( Read more about Gold's Missing Elephant Finds here... )

On the demand-side, meantime, "[Gold] is still a very good hedge against inflation," says Ben Barber – a broker at Bell Commodities in Melbourne , Australia . He told to Bloomberg this morning that the move above $900 per ounce "may sort of signal that [investors] are seeing gold as cheap now."

The newswire's latest weekly survey of thirty-two gold-market professionals worldwide saw 17 investors, traders and analysts advise Buying Gold today. Only three advise selling, with 12 remaining neutral.

Friday's $20 gain in the Gold Price – the fastest jump in six weeks – came after a new survey pointed to the worst economic confidence amongst US households since 1980.

Inflation in the cost of living was reported last week at 3.9% – almost twice the current level of US interest rates and a serious challenge to the Federal Reserve's "loose money" policies.

Tomorrow brings Producer Price inflation numbers from US manufacturers, with housing sales and price data due to follow on Thursday and Friday.

Wednesday will see both the US Fed and the Bank of England release minutes from their latest interest-rate meetings.

"Upward pressure on global inflation expectations...should support near-term investment demand for precious metals," writes Manqoba Madinane for Standard Bank in Johannesburg today. "[But] it is worth noting that despite higher oil prices, investor sentiment in the precious metals markets remains cautious."

This caution is confirmed by the latest gold futures data from the US Commodity Futures Trading Commission (CFTC), released late on Friday.

Creeping up to a near two-month high in the week ending last Tuesday, "open interest" in gold futures & options remained fully one-fourth smaller than the all-time record total set in mid-January.

But the balance of bullish and bearish bets continued to reset from this spring's extreme readings, reaching a level last seen in Sept. '07 – just ahead of the Gold Price gaining 23% inside 10 weeks and adding 55% by mid-March this year.

The so-called "smart money" of commercial traders grew their bullish bets by more than 4%, reducing the net balance of their always-bearish position to its lowest level in eight months.

Speculative gold traders, in contrast, grew their short positions by more than one-fifth last week. That cut the net bullishness of what's often called the "dumb money" to its smallest level since the second week of Sept.

By Adrian Ash
BullionVault.com

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
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 2008

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