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
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Holds in 1% Range Ahead of Bernanke Speech; Inflation Threatens to Create "Penniless Billionaires"

Commodities / Gold & Silver Nov 08, 2007 - 09:12 AM GMT

By: Adrian_Ash

Commodities SPOT GOLD PRICES moved sideways in a broad 1% range early Thursday, dipping to $828 per ounce just ahead of the London opening before regaining $832 by lunchtime.


"It's important that we don't get over zealous at this point," says Brandon Lloyd for Mitsui in Sydney, pointing to the Gold Market 's 12-week run of rising prices to new 27-year highs, "especially given how quickly gold corrected from this level in 1980!"

"Technically, it is always prudent that we see a clean out in a rally to shake out the weak positions & ensure the rally is healthy. Unfortunately, there have been no signals that suggest a clean out is warranted.

"This makes an ardent bull bug like myself a little cautious."

On the foreign exchange market, the US Dollar slipped back after bouncing from new record lows overnight.

The Euro regained half-a-cent to approach $1.4700 once again. The British Pound held above $2.1050 – its own quarter-century high versus the Dollar – as traders correctly guessed the Bank of England would keep UK interest rates on hold at 5.75%.

"The Dollar cannot remain solely the problem of others [outside the US ]," said Nicholas Sarkozy, the French president, in a speech to Congress on Wednesday. "If we are not careful, monetary disarray could morph into economic war. We would all be its victims."

The European Central Bank also kept its rates on hold today, after Germany reported strong growth in its balance of trade for Sept. – denting hopes of a rate-cut to counter the Euro's current lifetime highs.

Ben Bernanke, chairman of the US Federal Reserve, will speak to the Joint Economic Committee at 11:00 EST today. After cutting US interest rates by 75 basis points since the global credit crisis began in August, he is expected to explain why he now says the balance of risks to inflation and economic growth are "balanced" – because the US bond market simply doesn't believe him.

"According to options analysis by the Cleveland Fed," reports the Financial Times this morning, "the market now sees a roughly 55% chance that the [US] central bank will cut another 50 basis points by the close of its January meeting, and an additional 15% chance that it will cut by 25 points by then."

The strong Pound capped the price of Gold in Sterling early today, holding 2% below yesterday's new record highs at £395 per ounce.

For French and German investors wanting to Buy Gold Today , the metal held below €570 in the first half of European trade.

"The stock market is getting crushed and that's why we're seeing a pullback in gold," reckons Robin Wilkin, chief technical analyst for J.P.Morgan's commodity and forex desks in London .

"It's all correlated."

But while the US stock market has now dropped more than 7% from its new all-time high of early October, the Gold Price has risen by 12% against the Dollar.

Gold Priced in Euros has gained more than 8% over the last five weeks. The top 100 shares in Europe , meantime, have dropped nearly 4% of their value on average.

"In the past, savers who wanted to avoid the problem of taking investment decisions and allocating their funds to different asset classes could keep their money in short term deposits," writes Dr.Marc Faber for AMEinfo.com today.

"But in today's new monetary regime – characterized by massive monetary and debt growth – savers are almost forced to invest into 'something' in order not to end up as 'penniless billionaires'."

The destruction of paper purchasing power rolled on in Thursday's early trading, as Asian stock markets dropped 2.8% for the day and bond yields continued to slide despite a fresh surge in commodity prices.

As the Wall Street open drew near, 10-year US Treasuries had been bid up to yield just 4.32%. Crude oil, on the other hand, bounced on news that a storm in the North Sea has forced ConocoPhillips and BP to shut-down 220,000 barrels per day of production.

"The oil market is being made more jittery by the storms in the North Sea ," said one London broker to Bloomberg this morning.

"With oil near $100, sentiment is unusually edgy."

Following on from the United Nations' warning that soaring food prices now threaten social unrest in developing countries, soybean prices were pushed higher after Argentina – the world's third-largest producer – raised export taxes on the oil-seed.

Wheat prices rose in South Africa , meantime, as the Rand slipped against the US Dollar.

The gold price for South African investors has continued to hit a series of new all-time highs since August. Trading above ZAR 5,100 per ounce, it has doubled in the last three years.

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 2007

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