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
Further Clues Reveal Gold’s Weakness - 26th Nov 20
Fun Things to Do this Christmas - 26th Nov 20
Industries that Require Secure Messaging Apps - 26th Nov 20
Dow Stock Market Trend Analysis - 25th Nov 20
Amazon Black Friday Dell 32 Inch S3220DGF VA Curved Screen Gaming Monitor Bargain Deal! - 25th Nov 20
Biden the Silver Bull - 25th Nov 20
Inflation Warning to the Fed: Be Careful What You Wish For - 25th Nov 20
Financial Stocks Sector ETF Shows Unique Island Setup – What Next? - 25th Nov 20
Herd Immunity or Herd Insolvency: Which Will Affect Gold More? - 25th Nov 20
Stock Market SEASONAL TREND and ELECTION CYCLE - 24th Nov 20
Amazon Black Friday - Karcher K7 FC Pressure Washer Assembly and 1st Use - Is it Any Good? - 24th Nov 20
I Dislike Shallow People And Shallow Market Pullbacks - 24th Nov 20
Small Traders vs. Large Traders vs. Commercials: Who Is Right Most Often? - 24th Nov 20
10 Reasons You Should Trade With a Regulated Broker In UK - 24th Nov 20
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20
THE STOCK MARKET BIG PICTURE - Video - 19th Nov 20
Reasons why Bitcoin is Treading at it's Highest Level Since 2017 and a Warning - 19th Nov 20
Media Celebrates after Trump’s Pro-Gold Fed Nominee Gets Blocked - 19th Nov 20
DJIA Short-term Stock Market Technical Trend Analysis - 19th Nov 20
Demoncracy Ushers in the Flu World Order How to Survive and Profit From What Is Coming - 19th Nov 20
US Bond Market: "When Investors Should Worry" - 18th Nov 20
Gold Remains the Best Pandemic Insurance - 18th Nov 20
GPU Fan Not Spinning FIX - How to Easily Extend the Life of Your Gaming PC System - 18th Nov 20
Dow Jones E-Mini Futures Tag 30k Twice – Setting Up Stock Market Double Top - 18th Nov 20
Edge Computing Is Leading the Next Great Tech Revolution - 18th Nov 20
This Chart Signals When Gold Stocks Will Explode - 17th Nov 20
Gold Price Momentous ally From 2000 Compared To SPY Stock Market and Nasdaq - 17th Nov 20
Creating Marketing Campaigns Using the Freedom of Information Act - 17th Nov 20
ILLEGITIMATE PRESIDENT - 17th Nov 20
Stock Market Uptrend in Process - 17th Nov 20
How My Friend Made $128,000 Investing in Stocks Without Knowing It - 16th Nov 20
Free-spending Biden and/or continued Fed stimulus will hike Gold prices - 16th Nov 20
Top Cheap Budgie Toys - Every Budgie Owner Should Have These Safe Bird Toys! - 16th Nov 20
Line Up For Your Jab to get your Covaids Freedom Pass and a 5% Work From Home Tax - 16th Nov 20
You May Have Overlooked These “Sleeper” Precious Metals - 16th Nov 20
Demystifying interesting facts about online Casinos - 16th Nov 20
What's Ahead for the Gold Market? - 15th Nov 20
Gold’s Momentous Rally From 2000 Compared To Stock Market SPY & QQQ - 15th Nov 20
Overclockers UK Quality of Custom Gaming System Build - OEM Windows Sticker? - 15th Nov 20
UK GCSE Exams 2021 CANCELLED! Grades Based on Mock Exams and Teacher Assessments - 15th Nov 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Marc Faber - Incredibly Bad Sentiment Makes Gold and Bonds a Buy

Commodities / Gold and Silver 2013 Jun 24, 2013 - 03:55 PM GMT

By: Adrian_Ash

Commodities

PRECIOUS METALS fell for the 5th session in six Monday morning in London, with gold retreating to $1280 per ounce as the US Dollar rose and most other tradable assets fell once again.

London and Paris' stock markets dropped 2.0% by lunchtime. Commodities also fell, extending their worst 1-week drop since October.


Silver prices retouched last Thursday's 34-month low of $19.65 per ounce.

Gold last week lost 6.9% against the US Dollar, its worst drop since the crash of mid-April and the 8th worst Friday-to-Friday of the last 5 years.

"The relatively mild nature of the attendant ETF [trust fund] liquidations at only 18.8 tonnes is surprising," writes Marc Ground at Standard Bank, noting that the 19 weeks of consecutive exchange-traded gold fund selling have averaged more than 28 tonnes.

"Perhaps the ETF sell-off is losing momentum."

For the gold price, however, "We're down 40% from the [2011] top," said Tom Kendall, head of precious metals research at Credit Suisse, to CNBC this morning, "and that's some very strong momentum for gold bulls to fight against.

"What we've seen is a lot of fear removed from the markets over the last two to three years. One of the big fears now playing against gold prices is the fear that we're going back into a world of positive real interest rates."

Government bond yields rose further Monday morning as debt values fell, taking 10-year US Treasury yields up to 2.64%.

Nearly one percentage higher from 12 months ago, 10-year US yields are now well above the last reading of US consumer price inflation at 1.7%.

"Right now equities, bonds and gold are very over-sold," said Dr.Marc Faber – author of the Gloom, Boom & Doom Report – to Bloomberg on Friday, "and they could easily rally."

Compared to the stock market however, "sentiment in bonds and gold is incredibly negative. In other words, as a contrarian I would rather buy bonds and gold than equities."

Also giving a reading contrary to the headlines about ending QE which followed Ben Bernanke's press conference last Wednesday, "Unless the economy has essentially fully recovered by mid-2014, more QE will be forthcoming," said Faber.

"Gold miners are as hated as anything I've seen," CNBC today quotes Arnold Espe, co-manager and vice-president of mutual fund portfolios at USAA.

World-leading gold miner Barrick will this week lay off one third of the 400 staff at its corporate HQ, the Toronto Sun reports.

In US gold futures and options, speculative traders last week slashed their bullish betting below the "net long" low of late 2008, new data showed Friday.

Globally, fund managers now hold a record-low allocation to commodities, according to Bank of America Merrill Lynch.

US investors have meantime pulled a record volume of money out of bond funds this month, according to TrimTabs Investment Research, beating the previous low of October 2008.

"Lost decade for bonds looms with growing stocks returns," says a newswire headline today.

Meantime in China – the world's second-heaviest market for gold after India – the Shanghai and Shenzen stock markets today sank 5.3% and 6.1% respectively, the worst 1-day drops in 4 years.

With overnight interest rates still high, but well below this month's spike above 10%, "Overall bank liquidity conditions are at a reasonable level," said the People's Bank in a statement on its website this morning.

Instead of pumping loans into China's money markets, the PBoC tells commercial banks to "prudently manage risks that have resulted from rapid credit expansion."

Over in India today, shares in major gems and jewelry companies sank by up to 20% on rumors of fresh government action to try and curb gold demand and thus imports.

"Falling gold prices, [Reserve Bank] policy, and impositions of high taxes are primary reasons," the Economic Times quotes A.K.Prabhakar at Anand Rathi Financial Services, who also warns that "demand for gold will slump further" if buyers are forced to show their tax-number PAN card.

Purchases worth over 500,000 Rupees ($8,300) already require the buyer to present their PAN card, which is issued by the Income Tax Department.

A central bank committee proposed in February making PAN cards mandatory for all gold purchases. India has a 1% wealth tax, applied on assets and portfolios worth over INR 1,500,000 ($25,000).

The government of neighboring Sri Lanka at the weekend imposed a new 10% import tax on gold, aimed at restricting gold smuggling to India spurred by New Delhi's recent curbs.

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 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.

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