Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
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
It’s Not Technology but the Fed That Is Taking Away Jobs - 16th May 19
Learn to Protect your Forex Trading Capital - 16th May 19
Gold Ratio Charts Offer The Keys to the Bull Market - 16th May 19
Is Someone Secretly Smashing the Stock Market at Night? - 16th May 19
Crude Oil Price Fails At Critical Fibonacci Level - 15th May 19
Strong Stock Market Rally Expected - 15th May 19
US China Trade Impasse Threatens US Lithium, Rare Earth Imports - 15th May 19
Gold Mind Reader's Guide to the Global Markets Galaxy: 'Surreal' - 15th May 19
Trade Wars and Other Black Swan Threats to Your Investments - 15th May 19
Our Long-Anticipated Gold Momentum Rally Begins - 15th May 19
Defense Spending Is Recession Proof - Defense Dividend Stocks - 15th May 19
US China Trade Issues Will Drive Market Trends – PART II - 14th May 19
The Exter Inverted Pyramid of Global Liquidity Credit risk, Liquidity and Gold - 14th May 19
Can You Afford To Ignore These Two Flawless Gold Slide Indicators? - 14th May 19
As cryptocurrency wallets become more popular, will cryptocurrencies replace traditional payments? - 14th May 19
How US Debt Will Reach $40 Trillion by 2025 - 14th May 19
Dangers Beyond a Trade War with China - 14th May 19
eBook - Greatest Tool for Trading? - 14th May 19
Classic Pitfalls for Inexperienced Traders - 14th May 19
Stock Market S&P 500 Negative Expectations Again - 13th May 19
Why Rising Living Standard in China Offers Global Hope - 13th May 19
Stock Market Anticipated Correction Starts On Cue! - 13th May 19
How Chinese Trade Issues Will Drive Stock Market Trends - 13th May 19
Amazon SCAM Deliveries for Fake Verified Purchaser Reviews "Brushing" - 13th May 19
Stock Market US China Trade War Panic - Video - 13th May 19
US Stock Market Leading Macro Economic Indicators Update - 12th May 19
SAMSUNG - BC94.L - Investing in AI Machine Intelligence Stocks - 11th May 19
US Increases Trade Tariffs Against China – Stock Markets, Gold, and Silver - 11th May 19
Who Has More To Lose In A No Deal Brexit? - 11th May 19
Gold at $1,344 Will Start Real Fireworks on the Upside - 11th May 19
Make America’s Economy Great Again - 10th May 19
Big US Stocks’ 2019 Fundamentals - 10th May 19
Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - 10th May 19
Stock Market Shake-Out Continues – Where Is The Bottom? - 10th May 19

Market Oracle FREE Newsletter

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

Spot Gold Hits New Low as Stocks and Sterling Crumble

Commodities / Gold & Silver Oct 24, 2008 - 10:56 AM GMT

By: Adrian_Ash

Commodities THE SPOT PRICE OF GOLD sank yet again Friday morning, sinking to a fresh 13-month low for US buyers at $683 per ounce.

Global stock markets and commodity prices also crumbled once more in the face of huge gains in the Dollar and Yen – the two currencies most owed by leveraged investors worldwide.


Tokyo's Nikkei stock index – strongly correlated with the Dollar/Yen exchange rate ever since this global money crisis began in summer '07 – sank another 9.6% for the session, losing a record one-third of its value so far this month.

US crude oil futures sank $5 per barrel to just $63, while German equities crashed more than 8% to their worst level since Nov. 2004.

On the forex market, the UK Pound slumped almost 10¢ to the Dollar – a massive 6% – on news that Britain's GDP shrank in the third quarter, the first negative growth since 1992. That took Sterling down to a fresh five-year low beneath $1.63.

The Gold Price in British Pounds held above £440 an ounce.

For French, German and Italian gold buyers, the price dipped briefly below €545 as the single currency dropped 3.5¢ to $1.25.

The Yen meantime leapt to a 13-year high vs. the Dollar as Japanese investors and savers fought to repatriate the $6 trillion-worth of overseas assets they've bought to escape Tokyo's own 0% interest rates over the last decade.

"Gold is following the Dollar and oil," reckons Wolfgang Wrzesniok-Rossbach of the German refining group Heraeus.

Although strong, "the physical demand we are seeing is not enough to stem the tide here."

The sell-off in world gold markets continues to be led by Gold Futures liquidation, however, with the market in future-promised delivery of gold dipping almost into “backwardation” earlier this week as near-dated futures prices only just holding above the Spot Price for immediate settlement.

Demand for physical investment metal worldwide continues to outstrip jewelry buying, meantime, with Gold Coin dealers still reporting shortages and unmet customer orders.

Here at BullionVault – the low-cost, high-security online gold ownership service – the stock of gold owned by customers choosing Zurich storage yesterday rose above 8.2 tonnes, more than twice its level of four months ago and more than three times as much gold as users now store in London.

In the so-called “paper gold” market, Gold Bullion held at HSBC's bank vaults in London on behalf of New York's SPDR exchange-traded trust – a financial vehicle in which investors can own stock certificates “backed” by one-tenth of an ounce, minus an annual 0.4% reduction – shrank barely 1% by Thursday, even as the international Spot Price fell by one-eighth in Dollar terms from Monday's start.

"[Owning physical] gold is unique in that it is an asset that bears no credit risk and therefore involves no counterparty,” notes Natalie Dempster, chief investment analyst at the World Gold Council marketing group.

“So gold is no one else's liability [and] this is an extremely attractive characteristic to investors given the current financial environment.

“The fact that gold did not head higher during the current phase of the crisis reflects gold's status as an asset of last resort which investors will use to raise cash in desperate times."

Adrian Ash

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