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
How to Capitalise on the Robots - 20th June 24
Bitcoin, Gold, and Copper Paint a Coherent Picture - 20th June 24
Why a Dow Stock Market Peak Will Boost Silver - 20th June 24
QI Group: Leading With Integrity and Impactful Initiatives - 20th June 24
Tesla Robo Taxis are Coming THIS YEAR! - 16th June 24
Will NVDA Crash the Market? - 16th June 24
Inflation Is Dead! Or Is It? - 16th June 24
Investors Are Forever Blowing Bubbles - 16th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24
Bitcoin Trend Forecast, Crypto's Exit Strategy - 31st May 24
Zimbabwe Officials Already Looking to Inflate New Gold-Backed Currency - 31st May 24
India Silver Imports Have Already Topped 2023 Total - 31st May 24
Gold Has Done Its Job – Isn’t That Enough? - 31st May 24
Gold Stocks Catching Up - 31st May 24
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24

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

© 2005-2022 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