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
IBM - Investing in AI Machine Intelligence Stocks - 25th May 19
Seasonal Dysfunction: Why Generations of Gold and Silver Investors Are Having Such Difficulty - 25th May 19
Employment - The Good and the Bad of Job Automation - 25th May 19
Gold Mining Mid-Tier Stocks Fundamentals - 25th May 19
Buy This Pick-and-Shovel 5G Stock Before It Takes Off - 25th May 19
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

Stocks Jump on G20 Plan as Gold Slips Lower

Commodities / Gold & Silver 2009 Mar 16, 2009 - 08:31 AM GMT

By: Adrian_Ash

Commodities THE PRICE OF GOLD slipped 1% early Monday in London, falling alongside the US Dollar as world stock markets jumped. By lunchtime in London, the FTSE100 index stood back at this month's opening level – and more than 9% above the six-year low hit on March 5th – after the weekend's G20 meeting of leading policy-makers agreed a rough plan for buying up "impaired assets" from international finance houses.

The AM Gold Fix , meantime, priced gold at $923 an ounce, almost 3% lower for March so far.

Eurozone investors now Ready to Buy  Gold saw the price slip once again, drifting 6% below the level of two weeks ago to €708 an ounce.

The single currency meantime broke above $1.30 for the first time this month.

"Sentiment towards gold is much more positive than a week ago," writes Walter de Wet in his precious metals note for Standard Bank. "Gold has been benefiting from reduced scrap inflows and increased ETF holdings."

Short-term, "We believe that ETF buying momentum isn't enough for gold to break above $950," de Wet goes on, but action in the derivatives market says otherwise.

"Call options [to buy] on the April Gold Futures contract, with a strike at $950, have risen quite sharply over the past two days, while put option volumes with a strike of $900 have declined substantially."

Latest data from US regulator the Commodity Futures Trading Commission (CFTC) also point to industry insiders growing their bullish position to a four-month high last week.

As a proportion of all Comex Gold Futures and options held by the so-called "smart money" of refineries, mints and bullion wholesalers, bets on a rising Gold Price rose to 32%.

Hedge funds and other speculators cut their bullish ratio to 87%, meantime, the lowest proportion since Gold Prices began recording higher highs and higher lows for the first time in nine months in mid-Dec. 2008.

"Gold's path from here is a little unclear after violent movements around $930 on Friday left us with a $20 range," says London gold-dealer Mitsui in its note to clients today.

"We are gravitating back to the middle of that range today as the market awaits some external direction."

On the data front this morning, UK house-price deflation hit 9.0% year-on-year on the latest Rightmove index of asking prices.

Tokyo apartment sales sank once again in Feb., said the Japan Real Estate Institute, while New York State's manufacturing activity showed a fresh record low according to new US data.

Consumer prices in the 16-nation Eurozone meantime rose at a 4.9% annualized rate between Jan. and Feb.

Current Eurozone interest rates stand at 1.5%.

Now holding interest rates below 0.1% and 0.25% respectively, both the Bank of Japan and US Federal Reserve will announce their policies for the coming month on Wednesday.

"We'll see the recession coming to an end probably this year," claimed US Fed chairman Ben Bernanke on CBS's 60 Minutes yesterday. "We'll see recovery beginning next year."

Setting out a wish-list for "bad bank" best practice, the G20 group of nations – which represents some 90% of the world economy, and with two-thirds of its population – agreed this weekend to buy toxic assets "at a fair price...with appropriate risk sharing, to limit the cost to the government as well as prevent moral hazard."

But while "government support should be temporary and should include well-defined exit strategies," the group of 19 leading economies – plus the current European Union president, the Czech Republic – also vowed at its meeting in Horsham, England that "G20 central banks will maintain expansionary policies as long as needed, using the full range of monetary policy instruments, including unconventional policy instruments."

Last week the Bank of England began "quantitative easing", pumping a total of £75 billion into the financial sector in a bid to revive inflation in asset and consumer prices.

Set for $3 trillion of fresh issuance worldwide this year, government bond prices fell hard early Monday – driving the yield offered by 30-year US Treasuries up 13 basis points to 3.81% – while the price of oil sank 3.5%, dropping to $44 per barrel.

Also meeting this weekend, the Opec oil cartel chose not to cut output quotas in a bid to support energy prices, disappointing bulls who bought late last week on expectations of tight supply.

By Adrian Ash

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 , 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 - 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