Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
The US Dollar is the Driver of the Gold & Silver Sectors - 28th Jul 21
Fed: Murderer of Markets and the Middle Class - 28th Jul 21
Gold And Silver – Which Will Have An Explosive Price Rally And Which Will Have A Sustained One? - 28th Jul 21
I Guess The Stock Market Does Not Fear Covid - So Should You? - 28th Jul 21
Eight Do’s and Don’ts For Options Traders - 28th Jul 21
Chasing Value in Unloved by Markets Small Cap Biotech Stocks for the Long-run - 27th Jul 21
Inflation Pressures Persist Despite Biden Propaganda - 27th Jul 21
Gold Investors Wavering - 27th Jul 21
Bogdance - How Binance Scams Futures Traders With Fake Bitcoin Prices to Run Limits and Margin Calls - 27th Jul 21
SPX Going for the Major Stock Market Top? - 27th Jul 21
What Is HND and How It Will Help Your Career Growth? - 27th Jul 21
5 Mobile Apps Day Traders Should Know About - 27th Jul 21
Global Stock Market Investing: Here's the Message of Consumer "Overconfidence" - 25th Jul 21
Gold’s Behavior in Various Parallel Inflation Universes - 25th Jul 21
Indian Delta Variant INFECTED! How infectious, Deadly, Do Vaccines Work? Avoid the PCR Test? - 25th Jul 21
Bitcoin Stock to Flow Model to Infinity and Beyond Price Forecasts - 25th Jul 21
Bitcoin Black Swan - GOOGLE! - 24th Jul 21
Stock Market Stalling Signs? Taking a Look Under the Hood of US Equities - 24th Jul 21
Biden’s Dangerous Inflation Denials - 24th Jul 21
How does CFD trading work - 24th Jul 21
Junior Gold Miners: New Yearly Lows! Will We See a Further Drop? - 23rd Jul 21
Best Forex Strategy for Consistent Profits - 23rd Jul 21
Popular Forex Brokers That You Might Want to Check Out - 22nd Jul 21
Bitcoin Black Swan - Will Crypto Currencies Get Banned? - 22nd Jul 21
Bitcoin Price Enters Stage #4 Excess Phase Peak Breakdown – Where To Next? - 22nd Jul 21
Powell Gave Congress Dovish Signs. Will It Help Gold Price? - 22nd Jul 21
What’s Next For Gold Is Always About The US Dollar - 22nd Jul 21
URGENT! ALL Windows 10 Users Must Do this NOW! Windows Image Backup Before it is Too Late! - 22nd Jul 21
Bitcoin Price CRASH, How to SELL BTC at $40k! Real Analysis vs Shill Coin Pumper's and Clueless Newbs - 21st Jul 21
Emotional Stock Traders React To Recent Market Rotation – Are You Ready For What’s Next? - 21st Jul 21
Killing Driveway Weeds FAST with a Pressure Washer - 8 months Later - Did it work?- Block Paving Weeds - 21st Jul 21
Post-Covid Stimulus Payouts & The US Fed Push Global Investors Deeper Into US Value Bubble - 21st Jul 21
What is Social Trading - 21st Jul 21
Would Transparency Help Crypto? - 21st Jul 21
AI Predicts US Tech Stocks Price Valuations Three Years Ahead (ASVF) - 20th Jul 21
Gold Asks: Has Inflation Already Peaked? - 20th Jul 21
FREE PASS to Analysis and Trend forecasts of 50+ Global Markets by Elliott Wave International - 20th Jul 21
Nissan to Create 1000s of jobs with electric vehicle investment in UK - 20th Jul 21
Bitcoin Halvings Price Forecast and Stock to Flow Analysis - 18th Jul 21
Dell S3220DGF Unboxing and Stand Assembly - 32 Inch 165hz Curved Gaming Monitor Amazon Discount - 18th Jul 21
What Does The Fed Mean By “Transitory Inflation” And Why Is It Important To Understand? - 18th Jul 21
Will the US stock market’s worsening breadth matter? - 18th Jul 21
Bitcoin Halving's Price Projection Forecasts Trend Trajectory - 18th Jul 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

UK Heads for Stagflation as Factory Price Inflation Soars to New Record

Economics / Inflation Jun 09, 2008 - 08:26 AM GMT

By: Mark_OByrne

Economics Gold closed at $895.50 in New York Friday and was up $23.30 and silver closed at $17.37 and was up 30 cents. In the New York Globex market gold subsequently rallied to $902.20 late Friday. Both traded sideways in Asia this morning prior to rallying higher in early European trading.

The gas explosion in Western Australia will further curtail supply of gold from that part of the world. It has led to the loss of some 30% of the state's gas supplies and is already creating serious problems for Western Australia's massive gold mining industry and will curtail supply for months, rather than weeks.


Similar supply issues remain prevalent in South Africa due to their significant power supply difficulties which will also be supportive of prices.

Geopolitical Risk in Middle East Remains Ever Present but Largely Unacknowledged
A reminder if one were needed that geopolitical risk remains ever present was given on Friday when the Israeli Transport Minister, Shaul Mofaz, threatened to bomb Iran saying that bombing Iran's possible nuclear sites was “unavoidable”. Mofaz is the former army chief, has also been defence minister and is one of Prime Minister Olmert's most trusted ministers -  thus his comments were taken seriously in the markets and saw oil surge $US11 in a matter of hours and gold rally sharply simultaneously.

House Judiciary Chairman John Conyers, in a letter to President Bush on May 8, threatened to open impeachment proceedings if Bush ordered a U.S. attack on Iran. The letter is seen by some that planning for strikes on Iran is under way and pronounced.

Any attack on Iran would likely see Iran retaliate by withholding crude exports and targeting key oil transport routes in the strategically vital Straits of Hormuz -- where some 30 percent of global crude supplies pass through. There is also the possibility of a wider conflict developing in the region with Lebanon and Syria getting involved.

Should this happen, oil would likely surge to well over $200 a barrel in a short period of time and it would lead to a significant increase in safe haven demand for gold and consequently sharply higher gold prices.

Consumer Confidence Plummets as UK Inflation Surges to Record - Stagflation Threatens
Consumer confidence in the UK has hit a record low after big rises in the cost of living and falls in property values, figures have shown this morning. But hopes of a cut in interest rates to boost spending have been hit by the news that factory gate prices surged at their fastest rate for 27 years during May. According to a survey by the British Retail Consortium a third of Britons have major concerns about the economy. The Nielsen/BRC UK Consumer Confidence index now stands at 79 compared with 91 at the same time last year. That is the lowest score since the survey began in 2003.

Soaring petrol, scrap metal and food costs caused them to rise by 1.6%. That is the biggest increase since March 1981, according to the Office for National Statistics (ONS). Leading economist Howard Archer described the data as "absolutely appalling". British factory gate inflation hit a record level in May as firms' raw material costs surged at their fastest rate in at least 22 years. The Office for National Statistics said output prices rose 1.6% in May alone, taking the annual rate to a record 8.9%. Core output prices, which exclude food, drink, alcohol and  tobacco, also surged by 1.2% on the month, three times the monthly rate predicted by analysts.

Gasoline prices are surging in the UK and internationally. In the U.S., gasoline prices reached a national average of $4 a gallon for the first time over the weekend, adding more strain to motorists and the embattled U.S. consumer. Gas prices have doubled in recent months.

With house prices continuing to fall sharply and the property market now in effect crashing, stagflation is now clearly the biggest threat to the UK economy (and internationally) and all investment portfolios.


Today's Data and Influences
The U.S. housing market is back under the spotlight today with the release of pending home sales data which are again expected to be weak.

A speech by Bernanke this evening will be closely monitored after his comments last week about inflationary pressures and the impact on these of a weak dollar. In the eurozone, there are no releases of note but Trichet and Quaden of the ECB will also speak. Markets will be listening to see the extent their comments mirror the hawkish tone of Trichet's ECB press conference last Thursday.



http://quotes.ino.com/chart/?s =FOREX_XAUUSDO&v=d12&w=1&t=l&a =200

Silver
Silver is trading at $17.50/17.56 per ounce (1200 GMT).

PGMs
Platinum is trading at $2062/2072 per ounce (1200 GMT).
Palladium is trading at $432/437 per ounce (1200 GMT). 

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