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
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

Physical Gold Demand Jumps as an Alternative to Cash Paper Fiat Money

Commodities / Gold & Silver 2009 Jan 22, 2009 - 08:59 AM GMT

By: Adrian_Ash

Commodities THE PRICE OF GOLD dropped $10 per ounce to $845 early in London on Thursday, while world stock markets continued to recover from Tuesday's sharp sell-off.


Gold Bullion held flat for Eurozone buyers, however, as the single currency ticked low against the Dollar.

Government bond prices rose. Crude oil retreated from a one-week high of $45 per barrel.

"Gold has been well supported below $850 (the 200-day moving average)," says a technical note from Mitsui, the international gold dealers, today "but it has not been able to break the resistance at $865."

"The rebound in stock markets may be negative for gold," adds Peter Fertig at Dresdner Kleinwort in Hainburg, Germany speaking to Bloomberg.

"The fear of bank nationalization had been supportive for gold over the past few days."

Here in London today, shares in Royal Bank of Scotland – now almost 70% state-owned – continued to rally from Tuesday's record low of 10.3 pence.

Trading down 98.6% from its stock-market top of two years ago, RBS's financial strength has been downgraded from B to C-minus by ratings-agency Moodys, which fears "significant future losses" at the UK's largest bank.

Daily Telegraph columnist Ambrose Evans-Pritchard notes that the UK government holds foreign currency reserves of less than $61billion, but the foreign liabilities of UK banks – which it has effectively taken onto its books – stand at $4.4 trillion, more than twice the country's annual economic output.

Thursday morning in London trade, the British Pound bounced from its new record low vs. the Yen and 23-year low vs. the Dollar.

The Gold Price in Sterling held above £610 an ounce after reaching new record highs Wednesday at £626.

"The key to where gold heads from here is in concerns about the banking sector," says UBS analyst John Reade in a note to clients, raising his one-month price target from $800 to $900 an ounce.

"Our client flows suggest that the developments in the banking sector have truly spooked investors again," Reade explains, "with strong demand for Gold Coins and small investment bars seen since the start of the week."

MKS Finance in Geneva also confirms strong demand for higher-priced retail gold products, matching the surge in sales witnessed during October and Nov. '08.

Looking ahead for Gold in 2009 , RBS Capital in Toronto advises "holding a significant position in the Gold ETF or Gold Bullion in lieu of cash."

Its latest Global Mining Investment Strategy & Outlook Report – quoted by MineWeb – RBC notes that gold has outperformed other asset classes during the majority of previous Fed rate-cutting cycles, especially when matched by a fast-growing money supply and Negative Real Rates of Interest .

Over in Tokyo today, Japanese electronics giant Sony warned of a near-$3 billion loss for the year-to-March '09.

The Bank of Japan meantime held its key interest rate at 0.1%, while forecasting a 1.8% contraction in GDP for full-year '08-09, followed by a 2% contraction next year.

Across the Sea of Japan, Korea's economy shrank by 5.6% in the last 3 months of 2008, the central bank said this morning, with exports collapsing by one-eighth.

China today reported growth of 6.8%, sharply down from end-2007's record 13% rate.

And meantime in Washington, President Obama's $825 billion stimulus plan was said to be making swift progress through House committee reviews.

"Whatever the rights and wrongs of trying to fix the blow-up in credit with fresh money and debt," as MoneyWeek magazine quotes BullionVault , "new spending and debt is just what we'll get...like it or lump it.

"Investors looking to take cover might want to lay in a stock of hard assets by Buying Gold or agricultural land – whatever can't be printed or inflated to zero."

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 2009

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