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

Gold Steady as UK Slashes Interest Rates to 57-Year Low

Commodities / Gold & Silver Nov 06, 2008 - 07:18 AM GMT

By: Adrian_Ash

Commodities THE SPOT MARKET PRICE of Gold held steady in London on Thursday morning, trading just shy of $745 per ounce as world stock markets sank to a one-week low and UK interest rates were slashed to their cheapest level in more than five decades.

"The bears are back in full control," says Walter de Wet at Standard Bank in Johannesburg, "after bulls across the globe realized that current economic problems cannot be voted away.


"The loss in confidence and accompanied fear is weighing heavily on commodities."

Following hot-on-the-heels of Wall Street's 5% drop and a 7% loss in most Asian stock markets overnight, the FTSE100 index of blue-chip UK equities sank 200 points to a five-session low in morning trade.

The Dax index in Frankfurt dropped 230 points to stand 8.5% below this point in Oct.

Crude oil fell back towards $64 per barrel, while copper and zinc futures both lost 5% from their opening levels in London.

Government bond prices rose sharply worldwide, pushing the yields paid to investors lower.

"Gold's failure yesterday created a double top in the Dec. Gold Futures contract at the $770 area," says today's technical note from Mitsui, the precious metals dealer in London.

"The move below $750 has increased the physical off-take [for jewelry, industrial and physical Gold Investment use], and this should support the market in the short term. Look for minor support at the $733 area followed by major support at $720."

On the data front this morning, UK house prices were reported 14.9% lower in Oct. from 12 months before – a record rate of collapse – while car sales fell at their fastest pace in 17 years.

Over in Germany – the world's third largest economy – new factory orders sank 8% in Sept. from Aug. the official data agency said this morning, wildly outpacing analyst forecasts.

Late last month, truck-maker Volvo reported European sales of just 115 units for the third quarter, down from almost 42,000 trucks sold between July and Oct. 2007.

"The risks to inflation have shifted decisively to the downside," said the Bank of England as its slashed UK interest rates by 1.5% this morning – the deepest one-day cut in 24 years.

Now costing just 3.0% per year from the Bank of England, the British Pound is now cheaper to borrow than at any time since the post-war low of 1951. Yet ahead of the European Central Bank's decision due at 12:45 GMT, the British Pound fell only briefly on the forex market, dipping to $1.5750.

That helped the Gold Price in Sterling hold above £466 an ounce. For Eurozone gold investors, the price stuck at €574.

"After the world rally on the day of the US presidential election, investors have now shifted their focus to how fast, and how well the new administration will address the current economic issues," reckons Yoo Soo-Min, an analyst with Hyundai Securities in Seoul, speaking to Reuters.

President-elect Obama is now rumored to be selecting his administrative team, starting with a Treasury secretary to replace the discredited former Goldman Sachs CEO – and key supporter of the $700 billion banking bail-out – Henry Paulson.

Candidates are said to include Timothy Geithner – president of the New York Fed and a regular supporter of low US interest rates – as well as former Treasury Secretary Lawrence Summers (now a Harvard professor) and even arch-inflation-fighter and former Fed chairman Paul Volcker.

Now in its final 60 days, the Bush administration yesterday moved to push through a $25 billion support package for US auto-makers. House of Representatives speaker Nancy Pelosi wants that package increasing to $61bn "with no strings attached."

Today in Tokyo, Japan's Toyota Motor Corp. cut its profit forecast in half, predicting a nine-year low ¥600 billion for the year to end-March vs. a previous forecast of ¥1.6 trillion.

Tokyo stock-brokers had expected to see operating profits of €1.34trn.

Meantime in the Gold Mining sector today, Randgold Resources – the London-listed African gold miner – reported third-quarter output down 12% from April-to-June.

Cash-costs per ounce rose by one-eighth.

Over in Caracas, Venezuela yesterday, the socialist government of Hugo Chavez announced that it's seizing control of the giant Las Cristinas project belonging to Canadian Gold Miner Stock Crystallex.

After seizing control of steel, energy and cement-producing assets deemed to be "strategic", mining minister Rodolfo Sanz told a radio interviewer that the 16-million-ouunce mine "will be recovered and will be operated under state administration."

Crystallex stock – already trading 90% down from this time last year – dropped by almost one-half on the news.

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