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
Stock Market: "Relevant Waves Vs. Irrelevant News" - 10th Jul 20
Prepare for the global impact of US COVID-19 resurgence - 10th Jul 20
Golds quick price move increases the odds of a correction - 10th Jul 20
Declaring Your Independence from Currency Debasement - 10th Jul 20
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Gold Weakens as Stock Markets Slump At Start of Week

Commodities / Gold & Silver Jan 28, 2008 - 09:18 AM GMT

By: Adrian_Ash

Commodities SPOT GOLD PRICES moved sharply in a $10 range early Monday, hitting $921.50 overnight in Asia – more than 1% above Friday's close – before slipping back to record an AM Fix in London of $916.50 per ounce.

Gold mining production in South Africa, the world's No.2 bullion producer, remained closed by power shortages meantime, and global stock markets continued to plunge, losing more than 3.4% in Asia and starting the week in Europe more than 1.8% down.

India investors are now the butt of jokes about bankruptcy, reports DNAIndia. The Sensex has lost almost 11% of its value since New Year's Eve.

"Gold is boosted by the expectation that the Fed will have to pick and choose between fighting inflation or fighting recession," said Wallace Ng, head of precious metals trading at Fortis Bank in Hong Kong , earlier today.

"Now it seems they have given up on inflation."

The Federal Reserve last week announced the sharpest cut to US interest rates since 1982, and it is certain to cut the price of Dollars further when it meets this Wednesday according to betting at the Chicago Board of Trade (CBOT).

Twenty-two out of 29 gold traders and analysts surveyed by Bloomberg News advise Buying Gold – already 9.5% higher against both the Dollar and Euro so far this month.

But in the physical Gold Bullion market, demand has virtually vanished according to reports from Asia .

"Most jewelers don't think the Gold Price is real," one bullion dealer in Singapore told Reuters today. "They are facing a dilemma.

"They can hedge [by selling gold futures], but they have to pay margin calls if the price goes up. If the price goes down, they also suffer. They are not happy. This is what I gather from the wholesaler side.

"Gold jewelers are even wondering whether they should liquidate their assets and keep cash instead."

Noting a sharp decline in last month's gold refinery turnover worldwide, the latest Refining Monitor from Mitsui says that physical buyers only began to step back in last week when the price fell nearly $50 from its previous high of $914 per ounce.

Now with a new all-time record set above $923 per ounce, "the short term outlook for the yellow metal looks uncertain," the Monitor notes. "While physical buying would increase at $850 levels, the volatility in the Gold Market cannot be ignored and this should act as the determining factor for the overall depth of physical interest."

Back in the equity markets, Australian investors were spared further losses by a public holiday on Monday, but today's sell-off in Asian-Pacific stocks took the region's total losses for 2008 to date above 12%.

The Gold Price in Aussie Dollars meantime rose to a fresh record high of A$1,050 per ounce, even as the AUD recovered from last week's seven-month lows vs. the Japanese Yen.

For British investors wanting to Buy Gold today, the price touched Friday's new all-time high above £465.50 per ounce as the Pound crept above $1.9800. European investors saw the Gold Price in Euros touch €627.30 as Societe Generale, the second-largest bank in France , dropped 7.4% of its value on fresh revelations about the "rogue trader" losses of $7.1 billion announced last week.

The Euro put on half-a-cent to $1.4720.

US crude oil prices fell to $90 per barrel despite analysts agreeing that the Opec oil cartel will not raise its output quotas at Friday's extra-ordinary meeting in Vienna .

Corn, soybeans and wheat prices all slipped back after a three-session surge, and copper prices also fell in Shanghai – the first drop in four sessions – despite news that domestic Chinese stockpiles of the metal have shrunk to a 32-month low.

The longer-term trend for raw materials prices still points higher, however, even as global interest rates are led lower by the US Federal Reserve. Since this time last year, the UBS Bloomberg Index of 26 major commodities has now risen by 31%.

Today platinum futures traded in Tokyo rose to a new record high as South African production remained closed by electrical shortages. The head of Anglo American, Cynthia Carroll, today flew to Johannesburg to discuss getting its production of 2.6 million ounces-per-year restarted.

Eskom, the state-owned power utility, offered to guarantee supplies to gold mining firms this weekend if they agree to reduce their consumption by 10% or more.

"I think the shortage has been happening all the time and Eskom was probably not as honest as it should have been about the situation," said Graham Briggs, CEO of South Africa's Harmony Mining on Friday.

"We've got all the costs right now, and we're not producing any gold, so we lose a serious amount of money, in the order of probably 60 million Rand a day [$8.6m].

"It is extremely serious."

An Eskom spokesman said on Sunday that it may be six weeks before South African gold-mining production comes back online.

"We are talking 200 million Rand in revenue [per day] and about R60m in profit," reckons Nick Goodwin, a local analyst.

"What's the use of having such high Gold Prices if you have no product to sell?"

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 2008

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