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
Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
How Much CHIA Coins Profit from 100 Plot 10tb Farm? Hard Drive Space Mining - 13th May 21
Stock Market Bulls Getting Caught in the Whirlwind - 13th May 21
Legoland Windsor Mini land and Sky Train Virtual Tour in VR 360 - UK London Holidays 2021 - 13th May 21
Peak Growth and Inflation - 13th May 21
Where’s The Fed? Watch Precious Metals For Signs Of Inflation Panic - 13th May 21
Coronavius Covid-19 in Italy in August 2019! - 13th May 21
India Covid Apocalypse Heralds Catastrophe for Pakistan and Bangladesh - 13th May 21
TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
Gold Price During Hyperinflation - 12th May 21
Stock Market Extending Phase Two? - 12th May 21
Crypto 101 for new traders – ETH or BTC? - 12th May 21
Stock Market Enters Early Summer Correction Trend Forecast Time Window - 11th May 21
GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
Cathy Wood Bubble Bursts as ARK Funds CRASH! Enter into a Severe Bear Market - 11th May 21
Apply This Technique to Stop Rushing into Trades - 10th May 21
Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
CHIA Getting Started SSD Crypto Mining by Plotting and Farming on Your Hard Drives Guide - 9th May 21
Yaheetech Mesh Best Cheap Computer /. Gaming Chairs on Amazon Review - 9th May 21
Breaking US Trade Embargo with Cuba - Build 7 Computers in 14 Hours Before Ship Sales Challenge - 9th May 21
Dripcoin Applies New Technology That Provides Faster Order Execution - 9th May 21
Capital Gains Tax Hike News: Was It REALLY to Blame for Sell-off? - 7th May 21
Stock Market Transportation Index Continues To Grind Higher - 7th May 21
SPX Stock Market Correction Arriving or Not? - 7th May 21
How to Invest in an Online Casino? - 7th May 21
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Rallies as Dollar and Yen Correct

Commodities / Gold & Silver Oct 28, 2008 - 12:48 PM GMT

By: Adrian_Ash

Commodities THE PRICE OF GOLD BULLION continued to rally on Tuesday, rising to a four-session high above $752 per ounce as world stock markets also bounced after falling 12 times in 19 days in October.


Government bonds fell fast as money moved back into equities, pushing the yield offered by 10-year US Treasuries ten basis-points higher to 3.79%.

Consumer-price inflation in the United States was last pegged at 4.9% annually.

US crude oil futures also turned higher early Tuesday, bouncing 2.4% from yesterday's 15-month low to $64.75 per barrel. Food stuffs and base metals jumped alongside, led by an 11% gain in nickel.

Both the Strong US Dollar and Japanese Yen meantime slipped back on the currency markets, dropping 1.5% and 3.5% respectively vs. the Euro.

"Today is Diwali , the Indian festival of lights," notes the London team at precious-metals dealer Mitsui, "and leading up to this festival, physical gold demand in India is quite strong.

"The difference this year is that this time there has been reports of strong demand across the globe, and given this insatiable appetite for Gold , it's no wonder prices have recovered to the $750 area.

"Expect this demand to slow if Gold approaches $800 per troy ounce," advises Mitsui, but "with another round of interest rate decisions in the US later this week, gold could find fresh legs to travel higher."

The Fed's dramatic rate cuts starting in Sept. '07 saw the Gold Price leap from $650 an ounce above $1,030 by mid-March.

Today the Central Bank of Iceland hiked its key lending rate from 12% to 18% in a bid to stall the collapse of its currency – now worth two-fifths less on the forex market than at the start of '08 – as part of the measures demanded by the International Monetary Fund (IMF).

With a total of $200 billion in reserves, the IMF has now committed one-quarter to aiding Iceland, Ukraine, Pakistan, Hungary, Belarus and Serbia.

"When you tot up the countries across the [East European & Baltic] region with external funding needs," says Neil Schering, an emerging markets strategist at Capital Economics in London, "you get to $500bn or $600bn very quickly – and that blows the IMF out of the water.

"The Fund may soon have to start calling on the West for additional funds."

This morning the Bank of England said it believes the total losses to private banks as a result of the global solvency crisis could total $2.8 trillion total losses.

The IMF forecast $945 billion this spring. Ben Bernanke – chairman of the US Federal Reserve – began the bidding in July last year at $100 billion.

"Intervention is needed in the Japanese Yen," says Steven Barrow at Standard Bank here in London, "not because it might help stabilize Japan's stock market, or because it might stem the plunge in its trade balance.

"Instead, Yen Intervention is needed in order to slow down the global de-leveraging and mass position-unwinding that's going on right now."

Global credit markets remain closed to Latin American infrastructure projects, reports Latin Finance , with Barclays Capital advising clients that while individuals countries may remain strong, "evaluating vulnerability a complicated task."

Yesterday the government of Austria was forced to cancel a new auction of sovereign bonds due to lack of demand – the third such delay to hit European states so far this month.

New finance has also dried up for mining companies worldwide, reports Martin Creamer in his Mining Weekly , knocking London's largest mineral groups 44% lower on the stock market since end-June.

Most telling for future Gold Mining Output , the top 20 junior mining stocks listed on London's Alternative Investment Market (AIM) dropped more than 50% of their value between July and Oct.

No fresh funds were raised by new issues of AIM mining shares, and secondary issues raised just £6.1 million ($9.5m) in September.

"In just three months, the value of Aim's mining universe has more than halved," notes Dr.Tim Williams, director of mining-and-metals analysis at Ernst & Young. "Access to new capital for those without great projects, is, at least for the time being, closed."

For many junior exploration firms, Dr.Williams says, the situation is now "nearing critical".

Last night the head of South Africa's Harmony Gold – the world's fifth largest gold miner by ounces – said he's no longer looking to expand via early-stage projects, but rather through buying already-productive mines.

"Probably 12 months ago we were looking at exploration properties and early projects," said the CEO, Graham Briggs, to MiningMX.com . "Now we're looking more towards the production side of things."

Gold Mining production worldwide fell 6% during the first-half of the year compared with H1 2007, the World Gold Council said Monday.

Totaling just 590 tonnes between April and July, global gold mining output was the lowest since 1996 according to data from the US Geological Survey.

The Spot Gold Price in US Dollars has more than doubled since world gold mining production peaked in 2003.

By Adrian Ash
BullionVault.com

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
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 2008

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