Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
S&P Stock Market Trend Forecast to Dec 2024 - 16th Apr 24
No Deposit Bonuses: Boost Your Finances - 16th Apr 24
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
S&P SEASONAL ANALYSIS - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Holds Flat as Stock Markets Rise

Commodities / Gold & Silver Nov 27, 2008 - 07:24 AM GMT

By: Adrian_Ash

Commodities

THE PRICE OF GOLD held flat for US and European buyers early Thursday, recording an AM Fix in London of $813.50 an ounce while world stock markets rose, even as terrorist attacks targeting US and British citizens in Mumbai closed India's stock and commodity exchanges.

US markets will remain closed today for Thanksgiving after gaining 3.5% on Wednesday.


Anti-government protestors meantime seized Bangkok airport in Thailand – Asia's fourth-busiest hub. Beijing's leading economic planner, Zhang Ping, told a news conference that "the impact of the global financial crisis on China's economy is deepening.

"Excessive production halts and closing of enterprises will cause massive unemployment, which will lead to instability," said the Cabinet National Development & Reform Commission chief, adding that GDP growth in 2008 will slip to 9% from last year's 11.9%.

"Support for Gold's Behavior appears to be coming from un-relenting investment demand in view of the global financial market crisis," notes Wolfgang Wrzesniok-Rossbach in his latest report for Heraeus, the global metals refinery group based in Hanau, Germany.

Pointing to the Gold Coins Shortage that continues to frustrate would-be retail investors worldwide, "there is sufficient raw material available," he says, "but it is in the wrong form – namely granules or 12.5kg standard wholesale Gold Bars ."

"The limited production capacity for [smaller] investment bars is now turning out to be a hurdle after 25 years of low investor interest. As a result, manufacturers cannot keep up with the sudden surge in demand."

Over in Tokyo today – where the standard Good Delivery bar for wholesale dealers must be of an exceptional 0.999 fineness – Gold Futures added 0.8% as the Japanese Yen recovered half of an overnight dip vs. the Euro.

The Nikkei stock index added 1.9% to reach a 7-session high, while Chinese equities rose 1% after the People's Bank of China slashed interest rates at the fastest pace since 1997's Asian Crisis on Wednesday.

European equities also rose, but government bond prices rose further too, pushing the yield offered by 10-year US Treasuries below 3.0% for the first time in their four-decade history.

Inflation in US consumer prices rose 3.7% in the year-to-November, according to official data. Stripping out "volatile" food and energy prices, so-called core prices ticked 0.1% lower last month from October.

Across the Atlantic, new data today showed the rate of money-supply growth in the 15-nation Eurozone – the world's largest single economic region – rising 8.7% in the year to November.

Down from a three-decade high of 12.3% in late 2007, that was still twice the rate first targeted by the European Central Bank on its foundation in 1999.

"Belief in the intrinsic value of gold in a unprecedented climate of wealth erosion and recessionary fears prompted a scramble for metal," reports the latest Refining Monitor from Mitsui, the precious metals dealer.

"In most cases, [refining] production operated at full capacity 24/7 and some refiners are unable to process new orders until early into the New Year. This frenzied effort was not exclusive to one region."

Surveying nine of the world's largest precious-metal refinery groups, Mitsui reports a surge in demand for – and premiums charged on – gold bars, Gold Coins and, in particular, silver.

The platinum-group metals, in contrast – where almost 70% of annual production goes to meet industrial demand – saw refining orders drop by one-tenth from the summer.

"In India, gold consumption was exceptionally strong at $750 and below," Mitsui goes on, "with dealers regularly unable to get their hands on sufficient metal. Premiums more often than not were significantly elevated.

"However, the surge in the Rupee-denominated Gold Price to record levels towards the close of October undermined much of the demand. Price-savvy punters opted to engage in profit taking...[but] as the Rupee price subsequently dipped 7%, buyers emerged in droves to push local prices to another record level last week."

The Indian Rupee rose vs. the Dollar today regardless of the terror attacks in Mumbai, while the British Pound also made a fresh assault on Wednesday's two-week high at $1.55.

That pushed the Gold Price in Sterling down to its lowest level so far this week at £525 an ounce – up by one-third from this time in 2007.

French, German and Italian investors looking to Buy Gold today saw it trade 3% below Monday's 6-week high at €628.50 as the European single currency rose above $1.29.

Both consumer and economic confidence in the Eurozone fell to a 15-year low this month, the European Commission reported on Thursday.

Yesterday it called for a joint €200 billion stimulus plan, yet to be approved at the national level.

"Sadly it would not do enough anyway to bring European economies out of the gloom for some time," reckons a note from Capital Economics here in London.

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

© 2005-2022 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