Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Surges Higher as Dollar Falls vs. Stocks and Euro

Commodities / Gold & Silver 2009 Mar 13, 2009 - 08:46 AM GMT

By: Adrian_Ash

Commodities THE PRICE OF SPOT GOLD leapt in late-morning London trade on Friday, erasing nearly all of this week's 5% drop for US and UK investors, but falling straight back an hour later as New York opened for business.

World stock markets meantime rose sharply once again, closing more than 5% higher in Tokyo.


Crude oil rose towards $48 per barrel, as the US Dollar slipped against all major currencies bar the Yen, dropping to a 3-week low vs. the Euro.

"Even though we've had such good gains" in stocks, noted Cleveland Rueckert, a market analyst at Birinyi Associates in Stamford, Connecticut, to Reuters overnight, "it could just be short-covering.

"Most people in the market are short-term traders right now and you're not really seeing the accumulation of stocks."

Government bonds fell back as world equities pushed upwards early Friday, knocking the yield on 30-year German bunds sixteen basis points higher to 3.95%.

Yesterday the US Treasury sold a fresh $11 billion of its 30-year debt, receiving bids for 2.4 times the bonds on offer but sparking fears that prices would be much lower – and interest-rate yields much higher – "were it not that the Federal Reserve may become a buyer of Treasuries themselves," as one strategist put it.

Urging a return to the easy leverage and loose liquidity of the last decade, "We need to boost [economic] demand through a range of measures," says UK finance minister Alistair Darling today, writing in the Wall Street Journal ahead of April's G20 summit of industrialized nations:

"Monetary loosening, fiscal stimulus, and restoring bank lending."

This week the Bank of England began " Quantitative Easing " in a bid to boost credit supplies in the UK, creating new money to buy £2 billion of government bonds.

With one-third of UK gilts held by foreign investors, however, "The feedback from the auction is that [domestic] pension funds and hedge funds did not sell," says Danny Gabay, a former Bank of England official and now a consultant at Fathom Consulting in London.

"That means the quantitative easing is going to do [the UK economy] less good" as the new cash goes overseas.

Measured against the Japanese Yen today – the world's strongest currency during the asset-price collapse of 2008 – Gold Bullion meantime jumped 3.2% at the Tocom Exchange in Tokyo.

Recovering its level of this time last year, the Gold Price in Yen has now risen 48% from the 31-month low it hit in October.

"We're seeing the purchasing power of money eroded," said one RBS analyst in London to Bloomberg this morning.

"As the recession bites, people want access to real money and there's no higher real money than gold."

In Switzerland today, where the Swiss National Bank said this week it will start selling Francs on the open market to try and depress their value, new data showed import prices falling faster than expected last month, down 1.8% in Feb. after falling 0.9% in Jan.

Retail sales in the European monetary zone rose less quickly than analysts hoped, meantime, but Labor Costs for the end of 2008 showed a sharper than expected rise of 3.8% year-on-year.

US import prices fell 0.2% in Feb., the Labor Dept. said Friday morning, much less than Jan.'s 1.1% drop and slower than the 0.8% drop forecast on Wall Street.

Overall, the United States recorded a $36 billion trade deficit for January, pumping out less than two-thirds of the dollars spent overseas compared with Jan. 2008.

"Only when we have confidence can we have courage and strength, and only when we have courage and strength can we overcome difficulties," said Chinese premier Jiabao Wen at the close of a 9-day parliamentary session this morning.

Speaking in Beijing, Wen hinted that any dip in China's GDP growth below 8% would spark a fresh stimulus package on top of the half-trillion-dollar program already begun.

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