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 Hits Two-Day High as Energy Costs Surge; Volatile Gold Prices Keeps Indian Wedding Demand Pent Up

Commodities / Gold & Silver Nov 14, 2007 - 10:08 AM GMT

By: Adrian_Ash

Commodities

SPOT GOLD PRICE reached their highest level in two days above $812 per ounce late Wednesday morning in London , regaining $17 from Tuesday's low as energy costs surged and government bonds were sold off.

"Medium term, consolidation above $745 implies a test of the all-time high and thereafter $1,000 in 2008," say analysts at Barclays Capital in London in a report.


They peg "near-term resistance" in the Gold Market between $812 and $818 per ounce.

"If there's no follow through below $790," added a Singapore gold dealer to Reuters earlier, "we should be able to end the week still above $810.

"I believe this so-called retracement should be a short-lived thing."

Crude oil prices also capped their two-day losing streak in Wednesday's early trade, adding 1.4% to $92.41 per barrel after Abdulla El-Badri – secretary general of OPEC cartel – rebuffed Washington 's demands for higher output quotas when the oil cartel meets in Riyadh this weekend.

There is "not a shortage of oil" in the market at present, he told reporters.

Government debt sold off worldwide, meantime, after Tuesday's late surge in Wall Street stocks. Asian equities picked up where Wall Street's strong bounce left off, driving the Hang Seng index in Hong Kong nearly 5% higher for the day.

But European equities were unable to keep the rally running, giving back an early 1.2% gain to trade barely changed by lunchtime in London after HSBC, the world's third-largest bank, wrote off $3.4 billion in charges for the July to Sept. period.

Chief executive Stephen Green admitted that "I don't think anybody knows" when the credit crunch caused by failing mortgage investments will reach its end. He now expects "more prolonged weakness" lasting into 2008 and perhaps 2009.

Earlier in Tokyo , Japanese stocks had managed to add 2.5% higher for the day, capping the Nikkei's run of eight consecutive losses as the Yen resumed its dive on the currency markets, bolstering the outlook for after Japanese exporters.

The US Dollar also continued to slide in London trade, dropping below $1.4700 per Euro after the Eurozone economies this morning reported stronger-than-expected growth for the July to Sept. period.

US business inventories for Sept. – plus retail sales data for Oct. – are due after Wall Street opens later today.

Wednesday also brings the US Producer Price Index, forecast to show a steep increase for Oct. thanks to the surge in oil prices, and the United Kingdom yesterday reported that Consumer Price inflation was running at a four-month high last month.

Wholesale electricity prices in the UK today leapt 38% to a 20-month high after National Grid – the national network owner – warned of "inadequate system margin" for this afternoon. But speculative hopes of yet-higher UK interest rates to come were dented by a sharp rise in Jobless Claims – up by nearly 10,000 in Oct. against City forecasts of a 6,000 drop.

That news knocked 2¢ off the British Pound inside an hour, pushing it back below $2.0650 and helping the Gold Price in Sterling recover above £392 per ounce. On Weds last week, gold reached an all-time high vs. the Pound above £403.

"It remains to be seen whether this drop in Gold Prices will attract physical buyers again," says Pradeep Unni at Vision Commodities in Dubai . "Near-term psychological support is spotted around $799, a breach of which would take the market to $780."

"As we proceed to the year-end, there could be some more profit taking. These volatilities are symptomatic of investors' desire to lock in profits and adjust portfolios."

Analysts at Mitsui in London note that last week brought "another record gold exchange position" in the futures market, but "the overall growth [in outstanding contracts] was relatively tame at 18 tonnes or 2%.

"The $850 level proved too difficult to surmount last week," Mitsui goes on, "and gold has significantly retreated from this area.

"Is this the retraction that the Gold Market was calling for? It is quite possible that gold will correct back to the $750 area, however in the current obese speculative environment, this is no bad thing for the overall medium and long term bullish trend."

Investors holding shares in the StreetTracks gold ETF sold out so quickly on Monday, they forced the trust to sell almost 11 tonnes of metal.

That unwound the last five weeks of accumulation, taking StreetTracks' total gold holding – used to "track" the Gold Price , rather than actually owned by its investors – down to 588.74 tonnes, a level first reached when gold was trading at $740 per ounce.

Meantime in India – the world's hungriest market for gold jewelry – "people have to buy as the wedding season is starting soon," says Pankaj Agarwal, a bullion trader at Brijwasi in Lucknow .

"But the Gold Price is so unstable that they are unable to make a decision."

"People have to buy for weddings in January," agrees another retailer in New Delhi , but Indian Gold Investment demand is also waiting for a further dip according to Reuters.

The newswire reports gold dealers in Mumbai taking advance orders to Buy Gold if it dips beneath $795 per ounce. Buyers would be keener still below $790.

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