Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
The Next Catalyst for Gold - 23rd Jan 20
5 Cyber-security considerations for 2020 - 23rd Jan 20
Car insurance: what the latest modifications could mean for your premiums - 23rd Jan 20
Junior Gold Mining Stocks Setting Up For Another Rally - 22nd Jan 20
Debt the Only 'Bubble' That Counts, Buy Gold and Silver! - 22nd Jan 20
AMAZON (AMZN) - Primary AI Tech Stock Investing 2020 and Beyond - Video - 21st Jan 20
What Do Fresh U.S. Economic Reports Imply for Gold? - 21st Jan 20
Corporate Earnings Setup Rally To Stock Market Peak - 21st Jan 20
Gold Price Trend Forecast 2020 - Part1 - 21st Jan 20
How to Write a Good Finance College Essay  - 21st Jan 20
Risks to Global Economy is Balanced: Stock Market upside limited short term - 20th Jan 20
How Digital Technology is Changing the Sports Betting Industry - 20th Jan 20
Is CEOs Reputation Management Essential? All You Must Know - 20th Jan 20
APPLE (AAPL) AI Tech Stocks Investing 2020 - 20th Jan 20
FOMO or FOPA or Au? - 20th Jan 20
Stock Market SP500 Kitchin Cycle Review - 20th Jan 20
Why Intel i7-4790k Devils Canyon CPU is STILL GOOD in 2020! - 20th Jan 20
Stock Market Final Thrust Review - 19th Jan 20
Gold Trade Usage & Price Effect - 19th Jan 20
Stock Market Trend Forecast 2020 - Trend Analysis - Video - 19th Jan 20
Stock Trade-of-the-Week: Dorchester Minerals (DMLP) - 19th Jan 20
INTEL (INTC) Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 18th Jan 20
Gold Stocks Wavering - 18th Jan 20
Best Amazon iPhone Case Fits 6s, 7, 8 by Toovren Review - 18th Jan 20
1. GOOGLE (Alphabet) - Primary AI Tech Stock For Investing 2020 - 17th Jan 20
ERY Energy Bear Continues Basing Setup – Breakout Expected Near January 24th - 17th Jan 20
What Expiring Stock and Commodity Market Bubbles Look Like - 17th Jan 20
Platinum Breaks $1000 On Big Rally - What's Next Forecast - 17th Jan 20
Precious Metals Set to Keep Powering Ahead - 17th Jan 20
Stock Market and the US Presidential Election Cycle  - 16th Jan 20
Shifting Undercurrents In The US Stock Market - 16th Jan 20
America 2020 – YEAR OF LIVING DANGEROUSLY (PART TWO) - 16th Jan 20
Yes, China Is a Currency Manipulator – And the U.S. Banking System Is a Metals Manipulator - 16th Jan 20
MICROSOFT Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 15th Jan 20
Silver Traders Big Trend Analysis – Part II - 15th Jan 20
Silver Short-Term Pullback Before Acceleration Higher - 15th Jan 20
Gold Overall Outlook Is 'Strongly Bullish' - 15th Jan 20
AMD is Killing Intel - Best CPU's For 2020! Ryzen 3900x, 3950x, 3960x Budget, to High End Systems - 15th Jan 20
The Importance Of Keeping Invoices Up To Date - 15th Jan 20
Stock Market Elliott Wave Analysis 2020 - 14th Jan 20
Walmart Has Made a Genius Move to Beat Amazon - 14th Jan 20
Deep State 2020 – A Year Of Living Dangerously! - 14th Jan 20
The End of College Is Near - 14th Jan 20
AI Stocks Investing 2020 to Profit from the Machine Intelligence Mega-trend - Video - 14th Jan 20
Stock Market Final Thrust - 14th Jan 20
British Pound GBP Trend Forecast Review - 13th Jan 20
Trumpism Stock Market and the crisis in American social equality - 13th Jan 20
Silver Investors Big Trend Analysis for – Part I - 13th Jan 20
Craig Hemke Gold & Silver 2020 Prediction, Slams Biased Gold Naysayers - 13th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold Recovers One-Third of Monday's 5% Plunge as Yen Retreats; Driven Higher by "Bargain-Hunting & Short-Covering"

Commodities / Gold & Silver Nov 13, 2007 - 08:49 AM GMT

By: Adrian_Ash

Commodities

SPOT GOLD PRICES bounced 1.6% from their overnight low on Tuesday morning, reversing one-third of Monday's $41 plunge to hold above $800 per ounce.

"There seems to be bargain hunters at below $800," said Ronald Leung of Lee Cheong Gold Dealers in Hong Kong earlier. "I think $792 and $793 are the supporting levels.


"It's only a healthy correction, not a bear market. It's attracting some buying interest."

Crude oil prices continued to slip, meantime, dropping to $94.56 per barrel of US light & sweet for Dec. delivery by midday in London .

The Nikkei stock index in Tokyo slipped for the eighth day running, taking its total losses for the year-to-date to more than 12%. Here in London the FTSE dropped 0.3% by late morning. Paris and Frankfurt stocks both lost 0.5% on average.

Wall Street stock futures pointed up after four days of losses, led yesterday by a "Who's Who" of the year's best performers as Reuters puts it, including Apple and Google.

"Having hit the massive technical level of the old 1980 high the Gold Price is correcting," notes Phil Smith for Reuters India today. "Pretty predictable stuff technically, with a level like that always going to be a tough nut to crack.

"As we have said many times it is very possible we retrace to again to test the three-month uptrend line [now around $780 per ounce]. Look for support there."

On the currency markets the Euro bounced back above $1.4600 after hitting a new one-week low of $1.4525 overnight, only to slip back as the session unfolded.

For French and German investors looking to Buy Gold Today , the price bounced off a two-week low of €545 overnight – more than 4% below Monday's opening – to trade at €550 per ounce.

The British Pound also rose, recovering nearly 1.5¢ from its two-week low of $2.0540 and holding the Gold Price in Sterling below £389 per ounce.

Versus the Japanese Yen, the US Dollar regained ¥1 from its 18-month low of ¥109.40 after Yasuo Fukuda, prime minister of Japan since the administration of Shinzo Abe collapsed in Sept., warned currency speculators to "be careful" of backing the Yen to rise.

"In the short term, Yen appreciation would certainly be a problem," Fukuda told the Financial Times . "Any kind of sudden change in exchange rates would not be desirable.

Pointing to the Yen's sudden 18-month highs against the Dollar, "it really is a reflection of the state of the US economy," he went on. "What we can do is limited. But speculative movements, I believe, need to be held in check.

"What I am saying is be careful so that [intervention] will not happen."

Japan now holds $893 billion in foreign currency reserves, much of it in US Dollars. Between 2001 and 2006, Tokyo poured $420 billion into the currency markets, selling Yen in a bid to push it lower.

According to The Economist 's Big Mac Index of purchasing power, the Yen remains more than 25% under-valued today. The British Pound, on the other hand, is now around 22% over-valued against the US Dollar – and yet the cost of living for British consumers continues to rise regardless, driven by near-zero rates of real interest paid on bank savings after tax and inflation.

Consumer Price Inflation in the UK broke back above the Bank of England's 2.0% target last month, driven by the surge in crude oil prices. Ali al-Naimi, the Saudi oil minister, today denied earlier reports that the Opec oil cartel will even discuss raising output quotas to prevent further price gains when it meets this week in Riyadh .

In the Eurozone, meantime, industrial production fell 0.7% month-on-month in Oct., said the statistics agency today. Germany 's much-watched ZEW index of economic sentiment sank to a reading of -32.5, well below both the -20.0 expected and Sept.'s reading of -18.1.

All eyes now are on the US pending home sales numbers due out at 16:00 EST. Analysts forecast a further 2.5% drop in Sept. from August's record 6.5% fall.

Back in the Gold Market , and as the Yen slipped back today from the sudden and shocking "carry-trade" unwinding seen during the previous two sessions, the Gold Price in Yen bounced nearly 2% from its three-week low to trade above ¥88,000 per ounce.

Gold futures traded at the Tocom continued to slip, however, losing another 1.2% today to equal $816 per ounce for delivery in Oct. '08.

"The Gold Market has been long and overbought for quite a long time," said a Hong Kong dealer to Reuters earlier today.

"It's a reverse of direction but we've also seen bargain hunting and short covering at the Tocom."

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

6 Critical Money Making Rules