Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Capped by Scrap Selling, Silver Rally Unstoppable

Commodities / Gold and Silver 2011 Mar 08, 2011 - 01:00 PM GMT

By: Adrian_Ash

Commodities

THE PRICE OF GOLD slipped against a rebounding Dollar in London on Tuesday, briefly losing 1.4% from yesterday's new all-time high as world stock markets extended their losses.

Major government bonds also slipped, while the Dollar knocked almost two cents off the Euro's new four-month high.


That buoyed the gold price in Euros above €33,100 per kilo.

Crude oil sank more than 2% following rumors of an emergency output-hike from the Opec nation cartel.

"We believe Opec spare capacity is much lower than the official data suggests," says a note from Goldman Sachs, and "most of the Saudi spare capacity is heavy crude oil."

The rebel-held Libyan oil port of Ras Lanuf today came under fresh air attack from Colonel Gaddafi's forces. The United Nations now estimates the death-toll at 1,000 in 3 weeks of violence, with 200,000 people fleeing North Africa's largest oil producing state.

"Physical gold demand is weak and we are entering a period where rallies are likely to attract more scrap and other gold selling," says Standard Bank's Walter de Wet in a note.

Even at new record highs in fact, "We believe that resistance in the physical market has assisted in capping rallies in gold the past two weeks," but his view on the gold price remains unchanged, says de Wet, repeating his target $1500 per ounce.

"We now see fundamental support below $1,370."

On a technical analysis, "The two-month support line at 1420.10 has shown us how solid it is," says Axel Rudolph  at Commerzbank.

"Last week's sharp drop ended on it [and then] further strength was seen."

Rudolph's latest note for Commerzbank clients also cites the "support at $1322" from the "long term uptrend" starting when Lehman Brothers failed in late 2008.

Over in silver bullion – which "seemed unstoppable" at one point on Monday, says MKS Finance in Geneva, rising 3.2% to new 31-year highs – the price today bounced higher from last week's finish at $35.60 per ounce.

In nominal dollars, silver prices have only ever been higher on 22 days, all of them amid the "mania" of Jan. and Feb. 1980 which led London auctioneers Phillips to demand that "Silver melting should be halted...[because] many people were selling irreplaceable antique silver items...destroying the national heritage."

Back here in 2011, "The total net long position [in gold futures] is now at its highest since the week ending 4 January," says the latest Precious Metals Weekly for ABN Amro from the VM Group, "but it's some way off November and October levels, implying that prices still have plenty of upside."

Overall last week, trust-fund share positions backed by gold bullion crept higher as a rise in BGI's iShares product "more than offset the fourth successive weekly fall" in the world-leading SPDR Gold fund, says VM.

"The iShares Gold Trust's assets jumped 6.7% last month," writes Olivier Ludwig at Index Universe, "while those of the SPDR Gold Shares fell 1.3%...suggesting IAU's cheaper expense ratio may be giving it the upper hand among some investors."

Market leader the SPDR gold ETF charges 0.40% per year for management. Since last summer, the IAU has charged 0.25%.

World No.1 for outright physical ownership, BullionVault charges less than half that much to customers holding $40,000-worth of gold.

"There have been some wholesale swaps out of GLD and into IAU," reckons Paul Weisbruch at the Street One Financial brokerage in Pennsylvania, quoted by Index Universe.

"Why are they doing it? It's strictly expense-ratio related."

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 2011

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.


© 2005-2022 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