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 - 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
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 Breached $1000 on Safe Haven Demand

Commodities / Gold & Silver Mar 14, 2008 - 09:58 AM GMT

By: Mark_OByrne

Commodities As expected, gold reached the greatly anticipated and important psychological mark of $1000 per ounce in the futures market yesterday. Profit taking subsequently saw it sell off slightly. Gold was up $13.10 to $992.30 per ounce in trading in New York yesterday and silver was up 39 cents to $20.34 per ounce. In Asian and early European trading gold consolidated and remained in a range between $993 and $1000. The London AM Gold Fix at 1030 GMT this morning was at $997.00, £491.617 and €641.158 (from $975.75, £483.26 and €630.90 yesterday).

We are at or close to new record nominal highs in gold in most major currencies and £500 gold is likely in the coming days.

The dollar continued to plummet yesterday against all major currencies including the finite currency that is gold and reached the fabled $1,000 gold in the futures market.  The dollar reached new record lows against the euro at 1.5647, reached parity with the Swiss franc and fell below the very important 100 yen mark (see FX below). The dollar also fell against commodities, the majority of which again surged in value yesterday with oil reaching over $111 per barrel.

Inflation is already high and increasing internationally and the recent surge in commodity prices has yet to feed into the inflation statistics. Today's Eurozone inflation data and US CPI data will likely further confirm that is inflation and indeed stagflation is taking or has taken hold. Yesterdays retail sales in the US were very poor and the preliminary Michigan Consumer Sentiment survey for March will likely not make pretty reading.

Safe haven demand for gold is likely to increase in the coming months as investors seek to diversify and protect themselves from stagflation and a likely serious US recession. Further systemic risk was seen in the growing meltdown in the hedge fund sector and dangerously illiquid trading in the credit markets and much of the capital markets.

The inflation adjusted high of $2,300 per ounce looks a near certainty in the coming years given the myriad of strong fundamental factors driving this market place. Especially with Ben Bernanke's huge fleet of jumbo helicopters throwing billions and billions of fiat dollars at the deepening credit and solvency crisis.
14-Mar-08 Last 1 Month YTD 1 Year 5 Year
Gold $   996.60
Silver     20.62
Oil   110.17
FTSE     5,711
Nikkei   12,242
S&P 500     1,315
ISEQ     6,165
EUR/USD   1.5546
© 2008

Support and Resistance

Gold's support is now at $960. Resistance is at today's new record nominal high of $998.55 and at the psychologically and technically important $1,000 per ounce mark.

FX Commentary
The US dollar is on the ropes. It has fallen to fresh lows against the Euro, it has traded below 100 against the Yen and it has fallen heavily against oil, wheat, soybeans and gold.

And still Treasury Secretary Hank Paulson opines ”a strong dollar is in the nations interest”, with about as much conviction as an ex-President explaining his relationship with a Whitehouse intern. The market is starting to rapidly move out of the infinitely creatable Greenback and into finite commodity assets. This is inflationary and who wants to own a low yielding currency with high inflation?

The downward spiral continues. Are we now experiencing what Jim Rogers spoke about as the dollar slid through 1.5000 against the Euro: “you ain't seen nothing yet!”

But nothing moves up or down in a straight line in the markets so a violent short term retracement can't be ruled out. Co-ordinated intervention by the world's Central Banks could be one cause and if you are to believe Hank Paulson, this should be expected.

Strategists at Morgan Stanley and Goldman Sachs Group Inc. say that the dollar's record-breaking slide may trigger the first coordinated effort to prop up the currency in 13 years.

Bloomberg reports that a key economic adviser to the German government has suggested that the ECB should directly intervene in the foreign exchange markets before the euro-dollar exchange rate gets out of control. "The uncontrolled increase of the euro rate vis-a-vis the dollar threatens employment growth in the euro area," said Peter Bofinger, one of Germany's so-called "five wise men" appointed to advise the government on economic matters.

If currency intervention did take place it would be another short term panacea. The free market will ultimately dictate the value of all assets and no amount of manipulation of currencies or gold will prop them up (in fiat currencies case),  keep them down (in gold's case) or stop them finding their true fundamental and intrinsic value (in both fiat currencies and gold).

Further dollar weakness is likely, the bell for the end of the final round has not rung, the greenback is still on the ropes and its guard is down. If only it had a few more ounces of gold to prop it up.

Sterling has risen against the plummeting dollar but this is a function of dollar weakness and not sterling strength. Sterling remains close to all time lows versus the euro and is showing weakness against other majors as well.

Silver is trading at $20.40/20.44 at 1030GMT.


Platinum is trading at $2100/2110 (1030GMT).
Palladium is trading at $506/512 per ounce (1030GMT). 

By Mark O'Byrne, Executive Director

Gold Investments
63 Fitzwilliam Square
Dublin 2
Ph +353 1 6325010
Fax  +353 1 6619664
Gold Investments
Tower 42, Level 7
25 Old Broad Street
United Kingdom
Ph +44 (0) 207 0604653
Fax +44 (0) 207 8770708

Gold and Silver Investments Ltd. have been awarded the MoneyMate and Investor Magazine Financial Analyst of 2006.

Mission Statement
Gold and Silver Investments Limited hope to inform our clientele of important financial and economic developments and thus help our clientele and prospective clientele understand our rapidly changing global economy and the implications for their livelihoods and wealth.
We focus on the medium and long term global macroeconomic trends and how they pertain to the precious metal markets and our clienteles savings, investments and livelihoods. We emphasise prudence, safety and security as they are of paramount importance in the preservation of wealth.

Financial Regulation: Gold & Silver Investments Limited trading as Gold Investments is regulated by the Financial Regulator as a multi-agency intermediary. Our Financial Regulator Reference Number is 39656. Gold Investments is registered in the Companies Registration Office under Company number 377252 . Registered for VAT under number 6397252A . Codes of Conduct are imposed by the Financial Regulator and can be accessed at or from the Financial Regulator at PO Box 9138, College Green, Dublin 2, Ireland. Property, Commodities and Precious Metals are not regulated by the Financial Regulator

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. Past experience is not necessarily a guide to future performance.

All the opinions expressed herein are solely those of Gold & Silver Investments Limited and not those of the Perth Mint. They do not reflect the views of the Perth Mint and the Perth Mint accepts no legal liability or responsibility for any claims made or opinions expressed herein.

Mark O'Byrne Archive

© 2005-2019 - 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