Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
The Big Short 2020 – World Pushes Credit/Investments Into Risk Again - 11th Jul 20
The Bearish Combination of Soaring Silver and Lagging GDX Miners - 11th Jul 20
Stock Market: "Relevant Waves Vs. Irrelevant News" - 10th Jul 20
Prepare for the global impact of US COVID-19 resurgence - 10th Jul 20
Golds quick price move increases the odds of a correction - 10th Jul 20
Declaring Your Independence from Currency Debasement - 10th Jul 20
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Gold Up as Battered US Dollar Falls to New Low Against the Eur

Commodities / Gold & Silver Oct 01, 2007 - 08:59 AM GMT

By: Gold_Investments

Commodities Gold
Gold made a new 28 year high close on the COMEX in New York Friday and again this morning. It closed at $743.10 on Friday and was up to $746.80 in early trading in Europe.


The yellow metal's strength is again in large part due to near record oil prices and the declining dollar which continues to sell off and has made another all time low against the EUR this morning at 1.4283.

Gold was up 10.9% in September and its close on Friday at $743.10 was the first time since 1980 that we have had a monthly close above $700. In January 1980 gold closed at $681.50. This is very significant and technicians and large hedge funds will see this as a strong technical buy signal. Gold has been up every one of the last 6 weeks and there may be a correction but it looks like we may surpass the inter day high over $850 before the end of the year. Gold was up 15% in the third quarter and this makes its performance in the third quarter the strongest since 1986.

The euro's new all time high against the battered dollar was the dollar's eight straight record daily low against the euro which is very unusual and highly supportive of the gold price (see Forex below).

Gold's bull market is built on very solid foundations with many strong fundamental factors. These include a possible dollar crisis, increasing food and energy prices and burgeoning inflation, falling U.S. property prices and global systemic issues.

The Daily Telegraph's Ambrose Evans-Pritchard wrote how what began as a credit crunch is developing into a dollar crunch and that "we are witnessing a run on the world's paramount reserve currency, an event that occurs twice a century or so, and never with a benign outcome." Pritchard quotes from Citigroup's latest report "Gold: Riding the Reflationary Rescue" written by Citigroup analysts John H. Hill and Graham Wark: "We believe that the policy resolution to the credit crunch will take the form of a massive, extended 'Reflationary Rescue', in a new cycle of global credit creation and competitive currency devaluations. This could take gold to $1,000 an ounce, or higher." The authors say the avalanche of central bank bullion sales earlier this year was "clearly timed to cap the gold price". They do not explain this explosive allegation, long promoted by the gold group GATA. But it would not surprise me if the European Central Bank's motive for selling 37 tonnes in April and May was to hold the euro price of gold below €500. Citigroup said the game was up once the Federal Reserve slashed rates half a point and opened the liquidity floodgates.

Evans-Pritchard says that the dollar crisis could degenerate into a wider currency crisis as other major currencies and economies also face serious challenges. This could lead to competitive currency devaluations going forward as countries and regions debase currencies in a 'beggar thy neighbour' attempt to maintain exports. He points out that the S&P 500 chart looks increasingly like its chart in September 1987 and concludes that "if Wall Street takes a beating this autumn, the safest play is pure metal."

Further fall out from the credit crisis was seen in UBS's huge losses and large financial losses in the City of London.

UBS SA , the largest Swiss bank, announced it had $3.4 billion in losses and announced a shake-up of management and job losses as it became one of the biggest casualties yet from the problems in credit markets. It posted a pretax loss of up to $690 million in the third quarter mainly because of losses linked to the U.S. subprime mortgage crisis. The loss will result in the shedding of 1,500 jobs from the bank's work force by the end of this year.

The FT reports that the City of London is losing millions of pounds in profits as the leading banks have failed to sell any loans in sophisticated asset-backed financial products in the wake of the credit squeeze. Europe's leading banks will lose £415m ($830m, €594m) in profits and £550m in revenue in the second half of the year, with London the biggest casualty as investors refuse to buy the securities in the aftermath of the U.S. subprime crisis, according to JPMorgan, the U.S. bank.

Forex and Gold
The trade weighted USD index traded to a new all time record low of 77.666. Considerably below its previous all-time low of 78.19 struck on its trade-weighted index in 1992. The dollar is now in uncharted territory both technically and literally and this new low could lead to further dollar selling and a sharper decline.

The sharply deteriorating U.S. housing market is beginning to affect the wider economy which may necessitate further interest rate cuts. However further interest rate cuts could lead to a run on the dollar and a currency crisis and thus the Federal Reserve has a massive dilemma with no easy solution. One path may lead to deflation and a more stable dollar the other to a declining dollar and stagflation.

Silver
Spot silver was trading at $13.79/13.81 (1130 GMT).

PGMs
Platinum was trading at $1380/1384 (1130 GMT) near last November's all time record high of $1,395.

Spot palladium was trading at $347/352 an ounce (1130 GMT).

Oil
Light, sweet crude for November delivery was flat and slipped 3 cents to $81.63 a barrel in Asian electronic trading on the New York Mercantile Exchange by midday in Singapore.

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@goldinvestments.org
Web www.goldinvestments.org

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.

Fair Use Notice: This newsletter contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of financial and economic significance. At all times we credit and attribute the copywrite owner and publication.
We believe this constitutes a 'fair use' of any such copyrighted material as provided for in Copyright Law. The material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for economic research purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.

Gold Investments 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