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
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Drops 2.2% as Yen Surges, Asian Stocks Slump, Oil Dips & London Banks Bounce

Commodities / Gold & Silver Nov 12, 2007 - 08:36 AM GMT

By: Adrian_Ash

Commodities SPOT GOLD PRICES fell sharply in early trade on Monday, retreating more than $19 per ounce from Friday's all-time record closing high as global equities continued to drop and the Japanese Yen spiked violently on the currency market.


The Japanese currency – which pays the lowest interest rates of 30 major currencies worldwide – surged overnight to an 18-month high against the US Dollar. It pushed the spot Gold Market for Japanese buyers back to a three-week low beneath ¥89,000.

The Gold Price in Yen had previous tripled since Jan. 2001 to reach a 24-year high of ¥96,000 per ounce last Wednesday.

The surging Yen today reached two-month highs versus the Euro and the high-yielding "carry trade" dollars of New Zealand and Australia. "The potential for a further carry unwind," reckons Michael Metcalfe at State Street, "is quite high now.

"These waves of risk aversion are washing through markets one after the other and seem to be hitting the credit markets first, then equity markets and then the forex markets.

"It's what happened in July and August and it seems to be what's happening again now."

As the Yen rose against all other currencies this morning, the US Dollar also bounced against everything else. It had previously lost value every week for the last ten, but by lunchtime in London, the bouncing Dollar pushed the Euro 1.3% below last Friday's new all-time highs to trade at $1.4650.

The British Pound fell faster still, losing more than 4¢ from Friday's quarter-century top – some 1.9% – to reach a two-week low beneath $2.0740.

Those moves in the currency market failed to stem the severity of gold's pullback for British and European buyers, however. For British investors wanting to Buy Gold Today , the metal dropped more than 3% from last Wednesday's new all-time record high to trade at a four-day low of £392 per ounce.

Gold Priced in Euros retreated below €560 per ounce, more than 2.5% beneath its 17-month peaks of last week.

"It's the long-awaited correction for gold," said one gold dealer in Singapore to Reuters earlier. "People have been saying the market is overbought."

"No bull market goes in a straight line," agrees Robert Rasbach of Ambrian Asset Management in London, whose programs include a $37 million precious metals fund, speaking to Bloomberg.

"With bull markets, you progress and then come off, and then progress again...[and] it's all coming together for gold.

"The Dollar is looking weak, jewelry demand is healthy and China is talking about diversifying its foreign reserves."

In the stock market overnight, Tokyo's Nikkei index continued to sink – driven into negative territory for 2007 to date – as export stocks were sold off in the face of that surging Japanese Yen.

Overall, the MSCI's Asia Pacific index lost 2.5% for the session. European markets were mixed and Wall Street futures held flat ahead of what may prove a quiet session on the Veteran's Day holiday. London's listed banking stocks turned higher after dropping 15% of their value in the first seven trading days of November.

In the broader commodity market, base metals all slipped and grains also fell in price as crude oil dropped $1 per barrel to trade around $95.

Saudi Arabia's oil minister said on Sunday that the OPEC oil cartel may consider raising output quotas before the end of this year to help ease pressure on oil consumers. But the surging oil price has already dented British businesses said the official statistics agency today.

Input prices for UK manufacturers rose 8.6% in the year to last month, said the ONS this morning, up from a 6.5% rate of increase in Sept. Output prices also rose, but only by 3.8% – showing yet again that, for now, manufacturers are sacrificing their profit margins to defend competitive offers.

"The strength of precious metals prices suggests that inflationary pressures are building up," says Philip Coggan, formerly of the Financial Times , in The Economist , "while the base-metals charts indicate, at a minimum, that the [global] manufacturing sector is losing momentum.

"The implication of all this is stagflation, the worst possible economic outcome for both equities and bonds."

Crucial data releases due from the United States this week will begin with pending home sales tomorrow, with Retail Sales following on Wednesday and Consumer Price Inflation on Thursday.

Figures for net flows of foreign money into US assets will be released on Friday.

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