Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
U-Turn or Perfect Storm? Globalization at Crossroads - 22nd Oct 19
Stock Market Indexes Struggle and TRAN suggests a possible top - 22nd Oct 19
Fake Numbers Fueling the Wage War on Wealth - 22nd Oct 19
A Look at Peak Debt - 22nd Oct 19
The Coming Great Global Debt Reset - 22nd Oct 19
GamStop Became Mandatory - 22nd Oct 19
Learn to Spot Reliable Trading Setups: ANY Market, Any Market Time Frame - 21st Oct 19
How To Secure A Debt Consolidation Loan Even If You Have A Bad Credit Rating - 21st Oct 19
Kids Teepee Tent Fun from Amazon by Lavievert Review - 15% Discount! - 21st Oct 19
Stock Market Stalls: Caution Ahead - 21st Oct 19
Stock Market Crash Setup? - 21st Oct 19
More Stock Market Congestion (Distribution) - 21st Oct 19
Revisiting “Black Monday Stock Market Crash October 19 1987 - 21st Oct 19
Land Rover Discovery Sports Out of Warranty Top Money Saving Tips - 21st Oct 19
Investing lessons from the 1987 Stock Market Crash From Who Beat it - 20th Oct 19
Trade Wars: Facts And Fallacies - 20th Oct 19
The Gold Stocks Correction and What Lays Ahead - 19th Oct 19
Gold during Global Monetary Ease - 19th Oct 19
US Treasury Bonds Pause Near Resistance Before The Next Rally - 18th Oct 19
The Biggest Housing Boom in US History Has Just Begun - 18th Oct 19
British Pound Brexit Chaos GBP Trend Forecast - 18th Oct 19
Stocks Don’t Care About Trump Impeachment - 17th Oct 19
Currencies Show A Shift to Safety And Maturity – What Does It Mean? - 17th Oct 19
Stock Market Future Projected Cycles - 17th Oct 19
Weekly SPX & Gold Price Cycle Report - 17th Oct 19
What Makes United Markets Capital Different From Other Online Brokers? - 17th Oct 19
Stock Market Dow Long-term Trend Analysis - 16th Oct 19
This Is Not a Money Printing Press - 16th Oct 19
Online Casino Operator LeoVegas is Optimistic about the Future - 16th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - Video - 16th Oct 19
$100 Silver Has Come And Gone - 16th Oct 19
Stock Market Roll Over Risk to New highs in S&P 500 - 16th Oct 19
10 Best Trading Schools and Courses for Students - 16th Oct 19
Dow Stock Market Short-term Trend Analysis - 15th Oct 19
The Many Aligning Signals in Gold - 15th Oct 19
Market Action Suggests Downside in Precious Metals - 15th Oct 19
US Major Stock Market Indexes Retest Critical Price Channel Resistance - 15th Oct 19
“Baghad Jerome” Powell Denies the Fed Is Using Financial Crisis Tools - 15th Oct 19
British Pound GBP Trend Analysis - 14th Oct 19
A Guide to Financing Your Next Car - 14th Oct 19
America's Ruling Class - Underestimating Them & Overestimating Us - 14th Oct 19
Stock Market Range Bound - 14th Oct 19
Gold, Silver Bonds - Inflation in the Offing? - 14th Oct 19
East-West Trade War: Never Take a Knife to a Gunfight - 14th Oct 19
Consider Precious Metals for Insurance First, Profit Second... - 14th Oct 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast Oct - Dec 2019 by Nadeem Walayat

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