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
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
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

Market Oracle FREE Newsletter

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

Gold Surges as Stocks Tumble on U.S. Economic Slump

Commodities / Gold & Silver 2009 Feb 27, 2009 - 08:32 AM GMT

By: Adrian_Ash

Commodities THE SPOT-GOLD MARKET regained a third of this week's 6% drop Friday morning in London, trading back above $960 an ounce on a flood of bad economic and financial news.

The US economy shrank by 6.2% annualized at the tail-end of 2008 said the Bureau of Economic Analysis – the worst rate in 25 years – while personal spending fell by 5¢ in the dollar.



Inflation in German consumer prices rose faster than forecast last month, but the Handelsblatt newspaper's "shadow" panel of experts still expects interest rates to be halved to 1.0% when the European Central Bank (ECB) meets next Thursday.

Meantime Citigroup – the Western world's largest bank – could become 36% owned by Washington in return for $25 billion of emergency cash, the Treasury said.

Today Citi recorded a further $9.6 billion write-down to its assets.

"Burnished by bad news, gold looks like a good each-way bet," says The Economist in today's print edition, citing analysis from BullionVault .

"What links today's gold fever with the 1970s rush is negative real deposit rates," the widely-respected journal explains.

"Many savers now prefer a claim on gold in a vault to one on cash in the bank."

Estimating a net loss of 33¢ in every fresh dollar it wants to inject into US commercial banks, the Obama administration yesterday proposed a further $750 billion purchase of their so-called "toxic assets".

Its total budget for fiscal 2009 – spending $3.3 trillion – would require net borrowing of nearly $15,000 per US household.

Here in London on Friday, the Lloyds Banking Group announced a 2008 profit of £815 million ($1.2bn) at its Lloyds-TSB division, but losses of £10.8 billion ($15.2bn) at newly-acquired Halifax/Bank of Scotland.

The bank has so far failed to agree a sale of HBOS's toxic assets to the government's new half-trillion Asset Protection Scheme.

Losing value today for the 11th out of twenty February sessions, the UK's blue-chip FTSE100 index fell 3% to reach a fresh 5-year low.

Crude oil meantime dumped $1.30 per barrel to drop below $44. Government bonds rose sharply, pushing yields lower, as the US Dollar also gained on the currency market.

" Gold ETF buying [had] been flat since Monday," notes Walter de Wet in his gold-market note for Standard Bank today, "adding only 800kg to [trust-fund] gold holdings.

"Scrap metal flooding the market still far outweighs this. However, since last week, scrap inflows have slowed somewhat. The lower Gold Price should encourage EFT buying, while gold scrap flows may continue to fall."

Over in India – the world's hungriest physical market, but where gold jewelry demand fell to 305 tonnes in 2008, according to Virtual Metals' latest Yellow Book – "There are no reports of gold imports so far in February. Zero," said Suresh Hundia, head of the Bombay Bullion Association, to Reuters this morning.

And in Italy – the world's second-largest gold jewelry producer – "I am more worried about the volatility of the Gold Price than the high price of gold," says a leading manufacturer to JewelleryOutlook.com .

"If people feel that the value of gold can drop as suddenly as it rose, they may be less certain about making a purchase."

Virtual Metals forecasts a 5% bounce in Indian gold sales for 2009, and a 2% rise in Italian jewelry production

But with global stock markets and risk appetite turning lower again, "I think the worst for the downside is over," says Gerry Schubert, head of precious metals dealing at Fortis Bank.

"Gold will [only] continue to decline while the performance of equities and other risk assets remains less dreadful than of late," agrees John Reade, the much-followed head of metals analysis in London for Swiss bank UBS, in a note to clients today.

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