Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
Gold Price Trend Forcast to End September 2019 - Video - 25th June 19
Today’s Pets.com and NINJA Loan Economy - 25th June 19
Testing the Fed’s Narrative with the Fed’s Data: QT Edition - 25th June 19
What "Pro Traders" use to Find Profitable Trades - eBook - 25th June 19
GDX Gold Stocks ETF - 25th June 19
What Does Facebook’s LIBRA New Crytocurrency Really Offer? - 25th June 19
Why Bond Investors MUST Be Paying Attention to Puerto Rico - 25th June 19
The Next Great Depression in the Making - 25th June 19
The Bad News About Record-Low Unemployment - 24th June 19
Stock Market New High, but…! - 24th June 19
Formula for when the Great Stock Market Rally Ends - 24th June 19
How To Time Market Tops and Bottoms - 24th June 19
5 basic tips to help mitigate the vulnerability inherent in email communications - 24th June 19
Will Google AI Kill Us? Man vs Machine Intelligence - 24th June 19
Why are Central Banks Buying Gold and Dumping Dollars? - 23rd June 19
Financial Sector Paints A Clear Picture For Stock Market Trading Profits - 23rd June 19
What You Should Look While Choosing Online Casino - 23rd June 19
INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - 22nd June 19
Here’s Why You Should Drive a Piece of Crap Car - 22nd June 19
How Do Stock Prices React to Fed Interest Rate Cuts? - 22nd June 19
Gold Bull Market Breaking Out! - 21st June 19
Post-FOMC Commentary: Delusions of Grandeur - 21st June 19
Gold Scores Gains as Draghi and Powel Grow Concerned - 21st June 19
Potential Upside Targets for Gold Stocks - 21st June 19
Gold Price Trend Forcast to End September 2019 - 21st June 19
The Gold (and Silver) Volcano Is Ready to Erupt - 21st June 19
Fed Leaves Rates Unchanged – Gold & Stocks Rally/Dollar Falls - 21st June 19
Silver Medium-Term Trend Analysis - 20th June 19
Gold Mining Stocks Waiting on This Chart - 20th June 19
A Key Gold Bull Market Signal - 20th June 19
Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - 20th June 19
Investing in APPLE (AAPL) to Profit From AI Machine Learning Stocks - 20th June 19
Small Cap Stocks May Lead A Market Rally - 20th June 19 -
Interest Rates Square Minus Zero - 20th June 19
Advice for Financing a Luxury Vehicle - 20th June 19
Stock Market Final Blow Off Top Just Hit… Next Week Comes the FIREWORKS - 20th June 19
US Dollar Rallies Off Support But Is This A Top Or Bottom? - 19th June 19
Most Income Investors Are Picking Up Nickels in Front of a Steamroller - 19th June 19
Is the Stock Market’s Volatility About to Spike? - 19th June 19
Facebook's Libra Crypto currency vs Bitcoin: Five Key Differences - 19th June 19
Fed May Trigger Wild Swing In Stock Index and Precious Metals - 19th June 19
How Long Do Land Rover Discovery Sport Brake Pads Last? - 19th June 19
Gold Golden 'Moment of Truth' Is Upon Us: $1,400-Plus or Not? - 18th June 19
Exceptional Times for Gold Warrant Special Attention - 18th June 19
The Stock Market Has Gone Nowhere and Volume is Low. What’s Next - 18th June 19
Silver Long-Term Trend Analysis - 18th June 19
IBM - Watson Deep Learning - AI Stocks Investing - Video - 18th June 19
Investors are Confident, Bullish and Buying Stocks, but… - 18th June 19
Gold and Silver Reversals – Impossible Not to Notice - 18th June 19
S&P 500 Stuck at 2,900, Still No Clear Direction - 17th June 19
Is Boris set to be the next Conservation leader? - 17th June 19
Clock’s Ticking on Your Chance to Profit from the Yield Curve Inversion - 17th June 19
Stock Market Rally Faltering? - 17th June 19
Johnson Vs Gove Tory Leadership Contest Grudge Match Betfair Betting - 17th June 19
Nasdaq Stock Index Prediction System Is Telling Us A Very Different Story - 17th June 19
King Dollar Rides Higher Creating Pressures On Foreign Economies - 17th June 19
Land Rover Discovery Sport Tailgate Not Working Problems Fix (70) - 17th June 19
Stock Market Outlook: is the S&P today just like 2007 or 2016? - 17th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

Gold Uptrend "Could See Significant Damage", Recent Falls "Largely Down to Futures Traders"

Commodities / Gold and Silver 2013 Feb 25, 2013 - 12:31 PM GMT

By: Ben_Traynor

Commodities

U.S. DOLLAR gold prices climbed back above $1590 an ounce Monday morning, extending gains from Friday following sharp losses last week, while stock markets also rallied, although the FTSE 100 in London saw smaller gains that other European indexes following news of a downgrade to Britain's credit rating.

"Support [for gold] sits at $1522, the low from December 2011," says the latest technical analysis from Scotia Mocatta.


"A break of that level will do significant damage to the long-term uptrend."

Last week's gold price fall was "largely due to the futures market", according to one analyst.

The gross short position held by speculative traders in gold futures and options on the Comex has neared or exceeded 60,000 contracts only five times before in the last eight years. On these occasions the average six-month change in the gold price, according to analysis by BullionVault today, has then been a gain of more than 28%.

Silver meantime climbed back above $29 an ounce Monday morning, as other industrial commodities also gained and US Treasuries fell. 

On the currency markets the Pound fell to its lowest level since July 2010 against the Dollar this morning, dropping more than 1% from Friday's close before recovering some ground as the morning went on, as markets reacted to ratings agency Moody's decision late Friday to strip the UK of its Aaa credit rating.

"The downgrade was expected and priced into credit markets," says a note from Morgan Stanley.

"Hence, we expect only a limited currency response in the short term."

The Sterling gold price ticked back above £1050 an ounce for the first time in just over a week this morning.

The Yen meantime fell to a 33-month low against the Dollar at the start of Monday's Asian trading, following reports that Japan's government is set to nominate Asian Development Bank president Haruhiko Kuroda as governor of the Bank of Japan.

"Kuroda is a fan of a weaker Yen and of deflation bashing," explains Societe Generale strategist Kit Juckes in London.

The government is also reported to be planning to nominate university professor Kikuo Iwata as one of Kuroda's deputies.

"Perhaps thanks to the inclusion of Iwata the market will expect more eye-catching bold easing measures," says Masamichi Adachi, senior economist at JPMorgan Securities in Tokyo.

The world's biggest gold exchange traded fund SPDR Gold Trust (ticker: GLD) saw a further 9.6 tonnes in outflows Friday. Over the whole of last week, the volume of gold held to back GLD shares fell 3.2% to 1280.7 tonnes. 

The world's biggest silver ETF iShares Silver Trust (ticker: SLV) by contrast saw its bullion holdings grow by 0.8% to 10,602.8 tonnes.

The amount of gold held by all exchange traded funds tracked by Bloomberg saw its biggest weekly drop since August 2011 last week, falling to a five-month low of just over 2560 tonnes.

"Market participants appear cautious after last week's sharp sell-off," says Nick Trevethan, senior commodities strategist at ANZ.

"While we have downgraded our near-term views, gold prices should accelerate in the second half [of 2013] on improving demand from India and China."

Indian gold industry insiders will be watching for any further measures aimed at reducing bullion imports in this Thursday's budget, after India hiked import duties on gold to 6% last month.

"Suppose you take the worst case scenario and the government completely bans the import of gold.

Do you think that Indian people would stop buying gold?" asks Prithviraj Kothari, director at

Riddhi Sidhi Bullions in Mumbai, adding that such a move would increase demand for smuggled gold.

India is traditionally the world's biggest gold buying nation, a position it held in 2012 according to the most recent World Gold Council data, and has to rely heavily on imports, which contribute to its trade deficit. 

A report published by India's central bank earlier this month suggests encouraging people to invest in gold-linked financial products rather than buy gold outright as one of way of reducing the reliance on gold imports. Seeking to increase the amount of gold people deposit with banks was another proposal.

"The government should come out with a voluntary gold deposit program where it won’t ask any questions about the source of gold, and offer an annual interest rate to depositors," suggests Bachhraj Bamalwa, president of the All India Gems & Jewellery Federation.

Kazakhstan and Russia meantime both added to their gold reserves last month for the fourth month running, according to International Monetary Fund data, while Azerbaijan bought gold for the first time in a decade.

Monday sees the second day of voting in Italy's general election, with newswire Reuters reporting a "surge in protest votes" for parties such as the Five Star Movement led by comedian Beppe Grillo.

"There are similarities between the Italian elections and last year's ones in Greece, in that pro-euro parties are losing ground in favor of populist forces," says Riccardo Barbieri, chief economist at Mizuho International in London.

"An angry and confused public opinion does not see the benefits of fiscal austerity and does not trust established political parties."

By Ben Traynor
BullionVault.com

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

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.(c) BullionVault 2013

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.

Ben Traynor 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