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
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Turns Bullish on Surging Global Inflation

Commodities / Gold & Silver Jul 21, 2008 - 11:35 AM GMT

By: Adrian_Ash

Commodities THE SPOT PRICE OF GOLD rose in London on Monday morning, undoing most of last week's 1% loss to trade above $963 per ounce as the New York opening approached.

Crude oil bounced from a seven-week low beneath $129 per barrel after US forecasters put a 29% chance on Tropical Storm Dolly reaching hurricane strength as it enters the oil-rich Gulf of Mexico .


The US Dollar ticked higher on the forex market, while European stocks reversed an early drop to stand around 1% higher by lunchtime.

Tokyo 's stock and Gold Markets were closed for a national holiday.

"Sentiment [towards Gold ] has turned decidedly more bullish on the back of inflation," notes today's Metal Matters report from Scotia Moccatta, the precious metals dealer.

"Funds have corrected their overbought situation leaving the market more balanced again. Expect the up-trend to resume and for prices to climb back towards $1,000 per ounce and beyond."

After consumer-price inflation was reported at 16-year highs last week across the United States , Eurozone and UK , government bond prices fell further today from June's "safe haven" highs.

That pushed the yield on two-year German bunds six points higher to 4.60%.

A new survey of 29 investment managers running almost $1.5 trillion in funds shows a further deterioration in sentiment towards US debt. The report from Ried, Thunberg & Co. in the US says to expect further hikes in open-market interest rates as a result.

The yield on 10-year US Treasury bonds – used to fund and price the bulk of US corporate and mortgage lending – closed 13 points higher last Friday, ending at a four-week high of 4.09%.

The Federal Reserve's overnight lending rate remains at 2.0%. Consumer price inflation jumped at its fastest rates since 1982 in June, reaching 5.0% year-on-year.

"The June US leading indicators index, due to be released today, could provide direction for the greenback," writes Manqoba Madinane at Standard Bank in Johannesburg .

"Market expectations are for a 0.1% decline. A surprise on the downside could see the US currency lose more ground today [but it] could put precious metals under more strain.

"We view the indicator as important to the outlook for PGM demand" – meaning the industrial platinum-group metals.

Platinum prices last week fell 9% to reach a five-month low after the auto-industry – which accounts for half annual demand for use in catalysts – reported sharp output reductions at GM, Chrysler and Ford.

"Platinum has held the long-term trend line at $1840 per ounce," says today's precious metals note from Mitsui in London , "and palladium has found support at $410.

"The question is whether the thin [summer] conditions will be a reflection of what is to come. It is a traditionally quiet period and it may be a case of watching other markets for guidance.

" Gold is holding its trend channel and a close [today] above $962 should point to higher prices. Silver looks a little more vulnerable but should follow gold's lead."

In the Western world's financial markets today, the UK 's largest home-lender – HBOS – sold only 8.3% of a £4 billion rights issue ($8bn).

That gives the underwriters – investment banks Morgan Stanley and Dresdner Kleinwort – until the end-of-Tuesday to place the rest of the cash raising.

It also leaves the rest of London 's banking sector with little hope of finding underwriters for any rights issues they were hoping to float.

"Our banking system is a safe and a sound one," insisted US Treasury secretary Hank Paulson in a series of Sunday morning TV interviews this weekend.

"This is a very manageable situation...Our regulators are focused on it."

Government-sponsored mortgage agency Freddie Mac – down 61% on the stock since mid-June – may reduce the quantity of home loans it buys from US banks, according to official filings made Friday.

It's also considering the sale of existing securitized debt as well as cutting its dividend before trying to raise $5.5bn in a new rights issue.

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