Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Why Gold Prices Hit a Three Month High This Week

Commodities / Gold and Silver 2014 Jul 06, 2014 - 12:59 PM GMT

By: Money_Morning

Commodities

Diane Alter writes: The current gold price as of July 1 represents a three-month high amid a weaker dollar and ongoing geopolitical tensions.

Gold for August delivery traded up $4.70 at $1,326.70 an ounce in early market action Tuesday. At last check, spot gold was up $2.70 to $1,333.60, its highest level since March 24.


Since gold's surge of more than $50 an ounce on June 19, the yellow metal has been back in the spotlight.

Gold investors have recently bulked-up bullish positions in the shiny metal. According to data released Friday from the U.S. Commodity Futures Trading Commission (CFTC), hedge funds and other large gold investors added a record amount of ounces to their long positions in the week ending June 24.

Long positions rose 61% to 47,784 contracts, or 4.8 million ounces. That was likely the biggest weekly increase on record, or at least since 2007 when the CFTC changed the way data is collected, according to Ole Hansen, head of commodity strategy at Saxo Bank. Short positions fell by nearly 25,000 contracts.

The bullish stance comes as gold prices recover from a brutal 2013. Gold plunged 28% last year, its biggest annual decline since 1981. The current price of gold is down 31% from gold's all-time high of $1,923.70 hit in September 2011.

Yet gold's solid year-to-date gains have been a bit overshadowed amid record-setting rallies for equity markets.

"Many have failed to notice the fact that gold has shown a strong performance this year, and it seems that the 2013 slump is still fresh in people's minds," Michael Gayed, chief investment strategist at Pension Partners LLC, told Bloomberg.

The yellow metal logged its second consecutive quarterly gain Monday, as Q2 2014 came to a close. June was the precious metal's best month since March.

Gold prices rose 6.1% during June, putting the metal's gains for the recent quarter at 3%. Year to date, gold prices are up 10%, the best start to a year since 2010.

What's Boosting the Current Price of Gold

Goosing the price of gold this year has been continuing tensions between Russia and Ukraine, and fears of an all-out civil war in Iraq. The yellow metal is frequently bought as a safe-haven hedge against geopolitical disturbances.

Iraqi army tanks and armored vehicles arrived in the northern city of Tikrit on Sunday. It was the second day of fighting to retake the city from Sunni militants, which now occupy large parts of the country. Tuesday, mortars landed at the golden-domed al-Askari mosque, injuring at least 14 people.

The shrine holds the tombs of Ali al-Hadi and his son Hassan al-Askari, both descendants of the prophet Muhammad, and considered by Shiites to be among his successors. Following the 2006 al-Qaida bombing of the revered shrine, thousands were killed and the sectarian violence put Iraq on the path of a full-scale civil war.

Also on Tuesday, Ukrainian forces launched full-scale military operations against pro-Russia separatists in the east just hours after the country's president ended a cease-fire agreement.

The Defense Ministry said Ukrainian forces "carried out strikes from the air and on land" Tuesday morning against separatist positions in eastern Ukraine.

Societe Generale analyst Robin Bhar said the geopolitical factor is difficult to predict and that uncertainty could "keep gold above $1,300 just on its own."

Also likely to keep the current - and future - price of gold propped up are inflation fears...

Inflation Is Bullish for Gold Prices Now

Gold has recently taken up its familiar position as an inflationary hedge.

Inflation has been heating up in the last several months. In May, consumer prices rose at more than a 4% annual pace. Prices for beef, pork, and other food prices are soaring. Core inflation - prices less food and energy - after remaining fairly tame for several years, is also accelerating.

Americans could be facing inflation greater than 3% or even 4% for the rest of 2014 and 2015.

"Going ahead, economic data will guide gold prices," Jeff Sica, who helps manage $1 billion at Sica Wealth Management, told Bloomberg. The metal could see additional gains if the U.S. economy slips or geopolitical turmoil accelerates, Sica said.

Sharing that sentiment is Howie Lee, an investment analyst at Phillip Futures.

"This quarter (Q3), we expect gold to remain elevated or even possibly climb due to multiple uncertainties," Lee told Reuters. He added that uncertainties over the uneven U.S. economic recovery and geopolitical tensions will provide a cushion for gold.

Lee also sees a positive technical picture for gold in Q3, with resistance at $1,365 and support at $1,189.

Gold prices could see some action later this week. Thursday brings the closely watched June jobs report, as well as the European Central Bank's policy meeting.

Money Morning recently delivered for our Members a two-part "cheat sheet" that outlines the right amount of gold for your portfolio. You can get that gold investing guide - for free - here.

Source : http://moneymorning.com/2014/07/01/current-gold-price-at-a-three-month-high-hits-second-quarterly-gain/

Money Morning/The Money Map Report

©2014 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning 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