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
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 Continues to Fall Despite Strong Seasonal Tendencies

Commodities / Gold & Silver Aug 18, 2008 - 07:37 AM GMT

By: Adrian_Ash

Commodities SPOT GOLD PRICES gave back a sharp 2% rally early in London on Monday, falling towards $790 per ounce as the US Dollar held flat on the currency markets.

Crude oil ticked up 25¢ to trade above $114 per barrel as Tropical Storm Fay threatened rigs in the Gulf of Mexico .


European stock markets were slightly higher as the Wall Street start drew near.

"Precious metals sentiment is still bearish as the US Dollar continues to strengthen against the Euro, albeit in a volatile manner," said Walter de Wet in today's market note from Standard Bank.

"The sharp Dollar rally seen in the last month makes us more confident that the Dollar's slide against most major currencies, which began in 2001, is over," adds his colleague Steve Barrow in London , "[although] the path back to a stronger Dollar in coming years won't be a smooth one."

This new bearish consensus on Gold – mirroring a 7% jump in the Dollar's trade-weighted index since this time last month – led hedge funds and other "large speculators" to close almost one-in-five of their bullish bets in the futures & options market last week.

Overall, says the latest data from US regulator the CFTC, the total number of live gold contracts now in play shrank by 11% in the week-ending Tues 12 Aug., taking "open interest" to its lowest level since Sept. 2007.

It's down by one quarter from the same time last month and smaller by one-third from the all-time peak set back in January.

But while professional and institutional investors trading paper bets on the Gold Price scramble to reduce their positions, private individuals are creating a squeeze in physical metal right across Europe and North America.

The US Mint has reportedly halted sales of American Gold Eagle coins, and is said to be refusing new orders from gold bullion dealers.

Kitco Inc., one of the largest gold investment retailers in the USA and Canada , warns on its website that "due to market volatility and higher demand in the entire industry, we are anticipating delays in supply of all bullion products.

"Once inventory is received there may...be delays in processing and shipping by our vaults."

Meantime in Germany , the Pro Aurum dealership based in Munich says that its website hit "meltdown" last week thanks to record-high traffic. It claims the same problem hit other German gold retailers, too.

"We've seen a dramatic increase in the number of orders. We called in our gold-dealing team to work the Assumption Day holiday [on Friday]. All our branches saw prolonged waiting times for over-the-counter cash sales, and this will surely continue over the coming week."

Pro Aurum also says it cannot fulfill specialist orders for rarer coins, and claims that "major institutions" asked if they could help out with delivery of physical metal.

Here at BullionVault , in contrast – the international service for private investors wanting to slash the cost of buying, owning and selling physical gold – the availability of professional-grade gold bullion, starting from one gram and up, remains entirely unaffected.

The stock of Good Delivery Gold Bars belonging to customers grew to 8.45 tonnes last week as users bought almost half-a-tonne of warranted bullion. ( You can Learn More About BullionVault here... )

"Fundamentally, I'm not sure about the Dollar in the long-term," said Masahiko Ejiri, a fund manager at the $26 billion Mizuho Asset Management Co. in Tokyo, to Bloomberg earlier today.

"I'm still a strong believer that commodity prices have to rise further because demand growth outpaces supply."

In Saudi Arabia , gold sales by value rose 14% to reach $1.3 billion between April and June reported the World Gold Council's local office today.

India 's gold demand fell 47% in volume terms between January and June from the same period last year, the WGC also said. But the recent drop in world Gold Prices has had "a positive impact on demand," according to one leading jewelry dealer in Mumbai.

"Once Gold Prices stabilize at lower levels, one could see a significant increase in demand," he went on, pointing to the typical Seasons in Gold that have seen prices rise almost 10% between August and January on average over the last decade.

Meantime on Wall Street today, analysts now expect a June-to-Sept. loss costing up to $1.8 billion or more from Lehman Bros., the fourth-largest securities firm in the United States.

Officials from the US Treasury are preparing to "wipe out" existing shareholders in Fannie Mae and Freddie Mac, according to a report in Barron's magazine, as part of a cash rescue to stop the nation's largest home mortgage lenders collapsing.

Following last week's agreement by Morgan Stanley to and settle $35 million in fines and buy back $4.5 billion of untradable "auction-rate securities" – the "$330bn behemoth that melted down in February" as Martin Hutchinson puts it at Prudent Bear – the second-largest US investment bank is now said by the Wall Street Journal to be tying new hedge fund loans directly to its own credit rating in the bond market.

Essentially, a better price for Morgan's own debt means it will extend new credit to those hedge funds using its services.

"If our firm is in trouble," in short, "we would rather fund ourselves than fund hedge funds," the WSJ quotes one broker claiming to know of the arrangement. It is apparently being applied by Goldman Sachs, too.

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