Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
YouGov's MRP Poll Final Tory Seats Forecast Revised Down From 359 to 338, Possibly Lower? - 10th Dec 19
What UK Economy (Average Earnings) Predicts for General Election Results 2019 - 10th Dec 19
Labour vs Tory Manifesto's UK General Election Parliamentary Seats Forecast 2019 - 10th Dec 19
Lumber is about to rally and how to play it with this ETF - 10th Dec 19
Social Mood and Leaders Impact on General Election Forecast 2019 - 9th Dec 19
Long-term Potential for Gold Remains Strong! - 9th Dec 19
Stock and Financial Markets Review - 9th Dec 19
Labour / Tory Manifesto's Impact on UK General Election Seats Forecast 2019 - 9th Dec 19
Tory Seats Forecast 2019 General Election Based on UK House Prices Momentum Analysis - 9th Dec 19
Top Tory Marginal Seats at Risk of Loss to Labour and Lib Dems - Election 2019 - 9th Dec 19
UK House Prices Momentum Tory Seats Forecast General Election 2019 - 8th Dec 19
Why Labour is Set to Lose Sheffield Seats at General Election 2019 - 8th Dec 19
Gold and Silver Opportunity Here Is As Good As It Gets - 8th Dec 19
High Yield Bond and Transports Signal Gold Buy Signal - 8th Dec 19
Gold & Silver Stocks Belie CoT Caution - 8th Dec 19
Will Labour Government Spending Bankrupt Britain? UK Debt and Deficits - 7th Dec 19
Lib Dem Fake Tory Election Leaflets - Sheffield Hallam General Election 2019 - 7th Dec 19
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19
What UK CPI, RPI and REAL INFLATION Predict for General Election Result 2019 - 5th Dec 19
Supply Crunch Coming as Silver Miners Scale Back - 5th Dec 19
Gold Will Not Surpass Its 1980 Peak - 5th Dec 19
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

Gold Dips to $705 but "Only Needs One Buyer to Start the Race Higher"

Commodities / Gold & Silver Sep 13, 2007 - 10:14 AM GMT

By: Adrian_Ash

Commodities

SPOT GOLD PRICES slipped to a two-day low in London on Thursday morning, dropping more than $7 per ounce to bounce off $705.20.

"We've seen quite an astonishing move up," said Frederic Panizzutti of the Swiss refinery MKS Finance to Bloomberg earlier. He believes it's led to "several waves" of selling as investors take quick gains.


But the Gold Market could rally sharply once more, he added, perhaps hitting $720 in short order.

"It just needs one buyer to come in and start the race higher."

Longer-term, "I don't think it'll be a problem sustaining these elevated levels," said Philip Klapwijk, executive chairman of the highly respected GFMS consultancy, at a seminar today in London .

"[Gold] may not be completely out of the woods as regards speculator sell-offs to raise cash or reduce leverage in our new world of sub-prime jitters.

"But the norm of safe-haven buying should dominate investor activity from now on."

Earlier today in India – the world's hungriest market for private gold purchases – gold demand slowed despite the fast-approaching festival season, as buyers were put off the recent increases in gold bullion prices.

"There is a little bit of buying from those [jewelers] in dire need," said one wholesaler to the newswires. "But it should pick up for the festivals."

The festival of Ganesh Chaturthi takes place this coming Saturday, when many Hindus – particularly in southern India – will buy gold ornaments and jewelry. Reuters says that local bank dealers are waiting for a dip below $700 per ounce.

"All eyes will be on the meeting of the US Federal Reserve on September 18," one Mumbai gold dealer told the Economic Times overnight. "It will decide how the Dollar will move."

"While inflation remains a concern for the US ," adds Debjyoti Chatterjee, a commodity analyst at MAPE Admisi, "a potential interest-rate cut and the worsening credit markets have been pressuring the Dollar.

"That, therefore, is supportive of safe-haven buying into gold."

Crude oil prices remained near yesterday's record highs above $80 per barrel early on Thursday, as Tropical Storm Humberto was upgraded to a hurricane by meteorologists just before it slammed in the Texan/Louisiana coast with windspeeds of 85mph.

In the broader currency markets, the Euro also dipped slightly from the new all-time high it hit against the US Dollar on Wednesday, slipping 31 pips to $1.3884 by lunchtime in Frankfurt .

The British Pound held steady at $2.0250 after dropping one cent yesterday on weak UK housing data, holding the Sterling Price of Gold above £348 per ounce.

The Reserve Bank of New Zealand, meantime, kept its interest rates on hold at 8.25% this morning, pushing the country's "carry trade" currency up to a two-week high against the low-yielding Japan Yen of ¥82 per NZ Dollar.

Data due at 08:30 EST today will show initial US jobless claims for the week-ending last Friday. Analysts looking for guidance as to the Federal Reserve's direction at next week's interest-rate meeting expect a 7,000 rise from the previous week to 325,000.

"With the Dollar as weak as it is and with so many unknowns out there at the moment, the dips [in gold] are there to be bought," says Simon Weeks, head of precious metals at Bank of Nova Scotia.

"Square or long is pretty much the place to be, but certainly not short. We're waiting for US retail sales data tomorrow, and then you have the [Fed meeting] next week. So, given half a chance, the market could tread water until we see the outcome of those."

The GFMS consultancy's latest research, released today, forecasts an average gold price of $690 per ounce for the second-half of this year.

"We're not seeing any real interest yet in strategic hedging from the gold mining companies," said Philip Klapwijk at today's launch. "But with the hedge book [of outstanding producer sales] a whole lot smaller than it was, you can't expect too much more of the heavy buy-backs we've seen in recent years."

Newcrest Mining said on Wednesday that it will raise $1.7 billion in a share offering, and use the money to close out its forward sales contracts via a buy back of gold.

GFMS forecasts that total world gold-mining production will slip in the second half of this year. Gold sales by central banks, it says, rose by a modest 4% between Jan. and July compared with the same period last year. Sales of so-called "scrap" gold – mostly recycled jewelry – fell by more than one quarter, despite Spot Gold Prices trading at their highest six-monthly average in history.

Gold-jewelry owners worldwide, in other words, want to hold onto the metal as its price continues to rise.

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 2007

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