Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
AMD Ryzen 4900x / 5900x and 4950x / 5950x Zen3 4th Gen IPC and Clock Speed and Core Specs - 14th Aug 20
Stock Market Gap Fills Suggests Market Momentum May Stall - 14th Aug 20
Silver May Be Overextended – But It’s STILL Cheap - 14th Aug 20
A Short Guide To Making Your First Stock Market Investment - 14th Aug 20
Is Tech Reality Affects our Dating Possibilities? - 14th Aug 20
Will You Make Money in the New Silver Bull Market ? - 13th Aug 20
Hyper-Deflation Capital Destruction And Gold & Silver - 13th Aug 20
Stock Market Correction Approaching - 13th Aug 20
Silver Took the Stairs to $21 in 2008, Took Escalator to $29 2010. Is Silver on Elevator to 120th floor today? - 13th Aug 20
President Trump Signs Additional COVID Relief – What To Expect from the Markets - 13th Aug 20
Has Gold's Upward Drive Come to an End? - 13th Aug 20
YouTuber Ads Revenue & How to Start a Career on YouTube - 13th Aug 20
Silver Notches Best Month Since 1979 - 12th Aug 20
Silver Shorts Get Squeezed Hard… What’s Next? - 12th Aug 20
A Tale of Two Precious Metal Bulls - 12th Aug 20
Stock Market Melt-Up Continues While Precious Metals Warn of Risks - 12th Aug 20
How Does the Gold Fit the Corona World? - 12th Aug 20
3 (free) ways to ride next big wave in EURUSD, USDJPY, gold, silver and more - 12th Aug 20
A Simple Way to Preserve Your Wealth Amid Uncertainty - 11th Aug 20
Precious Metals Complex Impulse Move : Where Is next Resistance? - 11th Aug 20
Gold Miners Junior Stcks Buying Spree - 11th Aug 20
Has the Fed Let the Inflation Genie Out of the Bottle? - 10th Aug 20
The Strange Food Trend That’s Making Investors Rich - 10th Aug 20
Supply & Demand For Money – The End of Inflation? - 10th Aug 20
Revisiting Our Silver and Gold Predictions – Get Ready For Higher Prices - 10th Aug 20
Storm Clouds Are Gathering for a Major Stock and Commodity Markets Downturn - 10th Aug 20
A 90-Year-Old Stock Market Investment Insight That's Relevant in 2020 - 10th Aug 20
Debt and Dollar Collapse Leading to Potential Stock Market Melt-Up, - 10th Aug 20
Coronavirus: UK Parents Demand ALL Schools OPEN September, 7 Million Children Abandoned by Teachers - 9th Aug 20
Computer GPU Fans Not Spinning Quick FIX - Sticky Fans Solution - 9th Aug 20
Find the Best Speech Converter for You - 9th Aug 20
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Gold and Safe Havens Tumble as Commodities and Stocks Rise

Commodities / Gold & Silver 2009 Apr 06, 2009 - 08:09 AM GMT

By: Adrian_Ash

Commodities THE SPOT-MARKET PRICE of physical gold fell to a 10-week low against the US and Canadian Dollars in Asia on Monday, falling 2.5% as world stock markets rose again and commodity prices reached a four-month high.

Versus all other major currencies except the Japanese Yen, gold fell to an 11-week discount, hitting €644 for European investors – almost one-fifth below Feb.'s record high – and falling nearly 3% to £586 an ounce against the British Pound.

For UK investors now Ready to Buy  Gold , that was more than 16% below Feb.'s top of £700 an ounce.

"A disappointing close by gold in both weekly and daily charts last Friday enticed follow-through selling as soon as [electronic platform] Globex opened," says the Mitsui Bussan team in Hong Kong today.

"Most of the selling of gold was executed in Globex but a major bank was seen as an aggressive seller near $881 in the [over-the-counter] market as well.

"The selling did not subside until noon [local time], but then Europeans decided to join the bearish camp."

Here in London on Monday, the FTSE100 stock index rose 0.9%, adding value for the 15th out of 23 sessions from last month's 5-year low.

Tokyo's Nikkei index ended the day 1.2% higher, while the Japanese Yen – the strongest "safe haven" asset during the turmoil of 2008 – sank on the forex market to a five-month low against both the US Dollar and single-currency Euro.

Government bonds were also sold lower as money moved into equities, knocking the yield offered by 10-year Australian debt sharply higher to 4.61%.

"Investment-grade credit spreads have contracted," says Manqoba Madinane in today's precious metals comment from Standard Bank, noting that the extra yield offered by 5-year US corporate bonds was squeezed one-tenth of a per cent lower on Friday.

Monday morning also saw raw materials prices rise sharply once more, with crude oil bouncing above $53 per barrel as soybeans and wheat prices both hit a two-month high.

Copper and zinc contracts traded at the London Metals Exchange hit a 5-month high, but base metal prices remained up to two-thirds below their 2008 records.

Priced in terms of the broad commodities market, Gold Bullion reached an all-time record high in Feb. 2009 – almost twice its previous 30-year average in terms of the CRB index of energy, metals and agricultural materials.

On the economic front today, European Retail Sales showed a 4.0% drop in Feb. from a year earlier, while Jobs Advertised in Australia fell nearly 9% from a month earlier and Japan's Leading Indicators report ticked lower.

After doubling from last year's near-90% plunge, the Baltic Dry index of international shipping prices has slumped once again, losing almost one-third since late Feb.

The United States shed over two million jobs in the first 3 months of this year.

"We're running out of impetus here," says Sean Corrigan of the $5 billion Diapason Commodities Management group in Lausanne, Switzerland, speaking to Bloomberg.

"We're not building houses anywhere in the world, car sales are down by 50 to 60% in the major economies, and commercial real estate is running into problems."

Copper prices have risen by more than 50% since the end of 2008, but now the metal is "very expensive relative to the collapse in industrial demand," agrees another UK fund manager.

Morgan Stanley analysts say copper is the industrial metal "most likely to fall" in the second-half of 2009.

"I don't think China has an interest in pushing the Dollar lower," said French finance minister Christine Lagarde in a radio interview on Sunday. "Like all of us, it wants the Dollar to be a strong currency."

"[But] it's true that a kind of competitive devaluation in the context of large deficits is a big temptation for a country whose currency is still a reference currency."

In the last two weeks, reports Time magazine , the Chinese authorities have inked "multibillion-dollar currency swap agreements with Indonesia and Argentina that effectively allow Beijing's two trading partners to bypass the Dollar as a medium of exchange."

The news comes after China agreed similar deals – funding its exports with Yuan loans – with Malaysia, Hong Kong and South Korea.

"The combined value of the various swaps – which enable the central banks of China's trading partners to sell Yuan to local importers to buy Chinese goods – is nearly $100 billion," says Time .

After last week's G20 summit of political leaders here in London agreed to use IMF Gold Sales to help fund $1.1 trillion of global monetary stimulus, "Central banks such as those in China, Russia and Japan are obvious counterparties to this kind of sale," said a note from Morgan Stanley analyst Hussein Allidina on Thursday.

Big-Dollar holders could see the IMF's sale of 403 tonnes of gold – already proposed but yet to be approved by majority shareholder, the US Congress – as a chance to Buy Gold "off-market, limiting the effect on prices on the spot and Comex markets," reports Bloomberg.

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