Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold, Silver and Copper - The 3 Metallic Amigos and Their Messages - 5th Dec 20
TESCO Christmas Decorations Festive Shop 2020 - How to Beat the Coronavirus Economic Depression - 5th Dec 20
Premium Bonds Good, Bad or Ugly Investment? Here's What Return (Prize Wins) to Expect - 5th Dec 20
How to accomplish a technical analysis with the Forex - 5th Dec 20
What is life insurance and what are the benefits of having it? - 5th Dec 20
Pre-COVID US Economy Wasn’t All That Great Either - 4th Dec 20
Bitcoin Breath Taking Surge - Crypto Trading Event - 4th Dec 20
Platinum Begins A New Rally – Gold & Silver Will Follow - 4th Dec 20
Don't Let the Silver (and Gold) Bull Shake You Off! - 4th Dec 20
Stronger Risk Appetite Sends Gold below $1,800 - 4th Dec 20
A new “miracle compound” is set to take over the biotech market - 4th Dec 20
Eiro-group Review –The power of trading education - 4th Dec 20
Early Investors set to win big as FDA fast-tracks this ancient medicine - 3rd Dec 20
New PC System Switch On, Where's Windows 10 Licence Key? Overclockers UK OEM Review (5) - 3rd Dec 20
Poundland Budget Christmas Decorations Shopping 2020 to Beat the Corona Economic Depression - 3rd Dec 20
What is the right type of insurance for you, and how do you find it? - 3rd Dec 20
What Are the 3 Stocks That Will Benefit from Covid-19? - 3rd Dec 20
Gold & the USDX: Correlations - 2nd Dec 20
How An Ancient Medicine Is Taking On The $16 Trillion Pharmaceutical Industry - 2nd Dec 20
Amazon Black Friday vs Prime Day vs Cyber Monday, Which are Real or Fake Sales - 1st Dec 20
The No.1 Biotech Stock for 2021 - 1st Dec 20
Stocks Bears Last Chance Before Market Rally To SPX 4200 In 2021 - 1st Dec 20
Globalists Poised for a “Great Reset” – Any Role for Gold? - 1st Dec 20
How to Get FREE REAL Christmas Tree 2020! Easy DIY Money Saving - 1st Dec 20
The Truth About “6G” - 30th Nov 20
Ancient Aztec Secret Could Lead To A $6.9 Billion Biotech Breakthrough - 30th Nov 20
AMD Ryzen Zen 3 NO UK MSRP Stock - 5600x, 5800x, 5900x 5950x Selling at DOUBLE FAKE MSRP Prices - 29th Nov 20
Stock Market Short-term Decision Time - 29th Nov 20
Look at These 2 Big Warning Signs for the U.S. Economy - 29th Nov 20
Dow Stock Market Short-term and Long-term Trend Analysis - 28th Nov 20
How To Spot The End Of An Excess Market Trend Phase – Part II - 28th Nov 20
BLOCKCHAIN INVESTMENT PRIMER - 28th Nov 20
The Gold Stocks Correction is Maturing - 28th Nov 20
Biden and Yellen Pushed Gold Price Down to $1,800 - 28th Nov 20
Sheffield Christmas Lights 2020 - Peace Gardens vs 2019 and 2018 - 28th Nov 20

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold Healthy Correction After January Gains

Commodities / Gold & Silver Feb 04, 2008 - 08:35 AM GMT

By: Mark_OByrne

Commodities Gold was down $15.30 (or 1.7%) to $907.90 per ounce in trading in New York on Friday and silver was down 8 cents to $16.79 per ounce. Gold traded flat to slightly up in Asia and has sold off in early trading in Europe and is down 0.77% to $902. Silver has also fallen and is down to $16.70 (-0.7%) per ounce.


With the dollar slightly weaker and oil weaker (NYMEX March down by 0.56%) gold has continued to sell off today. Stock markets have recovered somewhat from their recent battering and markets in Asia and Europe were up overnight and today. The primary reason for gold's weakness remains that it had become overbought in the short term and was due a correction. In the same way the stock markets were oversold in the short term and due a correction.

However, the primary secular trend in both is likely to reassert as the financial and economic fundamentals have not changed. Stocks appear to have entered a bear market and gold is clearly in a bull market.

04-Feb-08  
Last
1 Month
YTD
1 Year
5 Year
Gold $   902.35
5.02%
8.28%
39.36%
136.21%
Silver     16.69
9.39%
13.02%
24.85%
239.28%
Oil     88.40
-9.59%
-10.86%
49.37%
163.25%
FTSE     6,061
-4.53%
-5.81%
-3.96%
68.82%
Nikkei   13,860
-5.66%
-9.46%
-21.01%
63.34%
S&P 500     1,395
-1.14%
-4.96%
-3.65%
64.51%
ISEQ     6,877
-1.44%
-0.83%
-27.54%
#N/A
EUR/USD   1.4817
0.51%
1.59%
14.32%
36.14%

© 2008 GoldandSilverInvestments.com

The popular Wall Street adage is "As January goes, so goes the year" and that seems very likely this year. Yale Hirsch, the founder of The Stock Trader's Almanac, first introduced this concept in the 1960s. Gold was up 10% in January and most stock markets were down between 5% and 10%.

The January effect is extremely likely to come to fruition this year, especially given the continuing and deteriorating credit crisis. The FT reports that “heavily indebted European and US companies are facing growing financial difficulties because they cannot refinance their borrowings due to the continuing closure of the credit markets. Companies' inability to borrow is raising the spectre of defaults, particularly among the most highly leveraged companies in sectors such as property that have been hardest hit by economic uncertainty.”

After gold's huge outperformance In January, profit taking was inevitable and gold was due a healthy correction and this is what we are seeing at the moment. Normally, there is follow through on gold's sell off and it can often fall by some 2 to 4 days in a row prior to bottoming and consolidation. The old Wall Street adage to “never catch a falling knife” is very wise and prudence is warranted in the coming days.

Platinum and palladium remain very strong (up 0.8% and 1.3% respectively) today with the serious supply issues in South Africa continuing to create demand. Uncertainty regarding future power supplies to the mining companies looks set to remain a medium term issue which will support the platinum group metals (PGMs) but also gold and silver.

The London AM Fix at 1030 GMT this morning was at $899.50 (down from $933 on Friday). Gold has also fallen from recent highs in British pounds and Euros. It fixed at £455.328 (down from £468.75 on Friday) and €607.196 (down from €627.06 on Friday).

Support and Resistance
Support is now at $895 to 900 but should we close below these levels, look for a retracement to strong support at $845 to $850 which was previous resistance and the 50 day moving average (DMA) which continues to move up and is now up to $847.65.

FX
Despite weaker than expected Employment numbers out of the US on Friday, after a quick sell-off, the dollar began to rally. Some commentators point to the aggressive rate cuts from the Fed as a proactive approach to stave off a recession and hence save the dollar from any further losses.  The Euro failed to break through resistance at 1.4970, managing only a high of 1.4955, post the employment numbers release, however the Euro has managed to consolidate above 1.4000 and a further assault on 1.5000 and above cannot be ruled out.

The fact that the Bank of England are meeting this week weighed on Sterling and as a result EUR/GBP managed to rally back over 0.7500. This looks like it could be the trigger for the next move up to 0.7700. A 25 basis point cut is expected from the Bank of England this week with a larger move still possible.

The Australian, New Zealand and Canadian dollars all continue to strengthen against the greenback.

Silver
Silver is trading at $16.70/75 at 1200GMT.

PGMs
Platinum has again rallied to new record highs and is trading at $1780/1789 (1200GMT).

Production problems in South Africa are not a short term anomaly and production in the world's largest producer of platinum, with some 80% of world supply,  is likely to be continually affected by huge infrastructural challenges facing the electrical system in South Africa.

Palladium has rallied in unison with platinum and was trading at $417/423 an ounce (1200GMT).

By Mark O'Byrne, Executive Director

Gold Investments
63 Fitzwilliam Square
Dublin 2
Ireland
Ph +353 1 6325010
Fax  +353 1 6619664
Email info@gold.ie
Web www.gold.ie
Gold Investments
Tower 42, Level 7
25 Old Broad Street
London
EC2N 1HN
United Kingdom
Ph +44 (0) 207 0604653
Fax +44 (0) 207 8770708
Email info@www.goldassets.co.uk
Web www.goldassets.co.uk

 

Gold and Silver Investments Ltd. have been awarded the MoneyMate and Investor Magazine Financial Analyst of 2006.

Mission Statement
Gold and Silver Investments Limited hope to inform our clientele of important financial and economic developments and thus help our clientele and prospective clientele understand our rapidly changing global economy and the implications for their livelihoods and wealth.
We focus on the medium and long term global macroeconomic trends and how they pertain to the precious metal markets and our clienteles savings, investments and livelihoods. We emphasise prudence, safety and security as they are of paramount importance in the preservation of wealth.

Financial Regulation: Gold & Silver Investments Limited trading as Gold Investments is regulated by the Financial Regulator as a multi-agency intermediary. Our Financial Regulator Reference Number is 39656. Gold Investments is registered in the Companies Registration Office under Company number 377252 . Registered for VAT under number 6397252A . Codes of Conduct are imposed by the Financial Regulator and can be accessed at www.financialregulator.ie or from the Financial Regulator at PO Box 9138, College Green, Dublin 2, Ireland. Property, Commodities and Precious Metals are not regulated by the Financial Regulator

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. Past experience is not necessarily a guide to future performance.

All the opinions expressed herein are solely those of Gold & Silver Investments Limited and not those of the Perth Mint. They do not reflect the views of the Perth Mint and the Perth Mint accepts no legal liability or responsibility for any claims made or opinions expressed herein.

Mark O'Byrne 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