Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

"No Alternative" to Gold as Global "Tipping Point" Looms Amid Japanese Nuclear Crisis

Commodities / Gold and Silver 2011 Mar 17, 2011 - 09:14 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD prices stalled just above $1400 per ounce for the second day running on Thursday, as crude oil rose sharply amid the near-meltdown at Japan's Fukushima nuclear reactors.

Major-economy government bonds slipped back as Western stock markets rallied.


Japanese citizens reportedly joined the ex-pat exodus from Tokyo, 150 miles from the stricken plant.

"Water shot from trucks effective in cooling fuel pool as steam rose at Fukushima Daiichi No.1," said the Tepco energy company on its Twitter page earlier.

Airline tickets from Tokyo to Hong Kong, Singapore, Bangkok and Sydney have all more than doubled in price in the last week, with Bullet Trains to southern Japanese destinations now packed with young families according to press reports.

"The Japanese disasters are not happening in isolation," says bond-fund giant Pimco's CEO Mohamed El-Erian. "They add to the...uprisings in the Middle East and the related increase in oil prices.

"As such, the risk of a global macro tipping point cannot, and should not, be ignored."
"There's no other alternative really to gold," says MKS Finance's Bernard Sin in Geneva, adding that "the situation in the Middle East and North Africa is discouraging people to go short on gold."

At the start of the week, "You had a lot of people selling gold to cover losses in other markets," reckons Bart Melek, TD Securities' head of commodity strategy.

"We've seen this before, when people are in crisis mode and gold falls and then recovers."

Silver prices today turned lower at $34.65 per ounce, below Wednesday's peak 50 cents higher.

Despite fresh losses in Tokyo stocks, both European and US equity markets bounced sharply on Thursday, while the US Dollar also recovered.

The Euro had earlier risen back above $1.40 for the second time this month, while the Japanese Yen hit new all-time highs vs. the Dollar, taking out the 1995 high at ¥80 which followed the Kobe Earthquake.

Yen gold prices have fallen by 10% in the last week, but Tokyo premiums over benchmark London prices for wholesale gold bullion bars have risen by one half to $1.50 per ounce, says Reuters.

Forecasting joint intervention to depress the value of the Yen, "Disorderly price action has certainly taken place, driven by short-term speculative flows," says currency reasearch chief Derek Halpenny at the Bank of Tokyo-Mitsubishi UFJ.

Amongst $342 billion of overseas assets, repatriation by private Japanese savers would put at risk 3.7% and 11.2% respectively of Australia and New Zealand's bond markets, plus 3.1% and 7.3% of Hong Kong and Vietnam's stock markets according to a table from Citigroup analysts.

Both China and Germany said they're suspending all nuclear power development meantime, with the latter's EOn provider starting to close existing nuclear output on Thursday.

After the failed bond auctions by Russia and Poland on Wednesday, French publisher Lagardere delayed the flotation of its stake in Canal+ and Bloomberg said commodities giant Glencore and German holiday-firm Tui may also shelve initial public offerings.

Panic-buying of salt in Beijing meantime led China's National Development & Reform Commission to warn it would "resolutely crack down on illegal acts including spreading rumors to deceive the public" about the risk of radiation coming from Japan.

China's currency, the Yuan, will meantime be used to quote gold bullion prices at Hong Kong's century-old bullion exchange, the Chinese Gold & Silver Exchange Society, its president Haywood Cheung said today.

Cleared by Bank of China and Wing Hang Bank, the new Yuan-denominated gold offering could generate US$770 million in daily trades by this time in 2012, he believes.

"People could speculate on the Yuan through gold, which is globally recognized," Cheung is quoted by Bloomberg.

"We want to attract foreign investors who want to invest in the Chinese currency."

Vietnam's communist government, meantime, can only stop its citizens hoarding gold by boosting confidence in the Dong currency, bullion-market analysts at a conference this week.

A seminar held in Hanoir by the Vietnam Banking Association and Vietnam Bank for Industry and Trade heard calls for "a sensible approach to the regulation of the gold market" after the government froze new trading licenses.

"Vietnamese people are currently storing up around 500 tonnes of gold," said Tran Trong Khanh, general director of the Saigon Gold and Silver ACB-SJC Joint Stock Company.

"The State Bank of Vietnam (SBV) should organise training courses on gold trading and grant trading licenses."

By Adrian Ash
BullionVault.com

Gold price chart, no delay   |   Buy gold online at live prices

Formerly 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 2011

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.


© 2005-2022 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