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
VR and Gaming Becomes the Metaverse - 7th Dec 21
How to Read Your Smart Meter - Economy 7, Day and Night Rate Readings SMETS2 EDF - 7th Dec 21
For Profit or for Loss: 4 Tips for Selling ASX Shares - 7th Dec 21
INTEL Bargain Teck Stocks Trading at 15.5% Discount Sale - 7th Dec 21
US Bonds Yield Curve is not currently an inflationist’s friend - 7th Dec 21
Omicron COVID Variant-Possible Strong Stock Market INDU & TRAN Rally - 7th Dec 21
The New Tech That Could Take Tesla To $2 Trillion - 7th Dec 21
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Recovers as Emerging Economies Scramble to Cap Food-Price Inflation

Commodities / Gold & Silver Apr 02, 2008 - 12:25 PM GMT

By: Adrian_Ash

Commodities THE PRICE OF GOLD rose steadily in European trade early Wednesday, adding more than 1% from last night's New York finish as Asian stock markets closed sharply higher.

European stock markets held flat, however, while crude oil added one dollar to $101.96 per barrel and short-dated US Treasury bonds bounced higher from Tuesday's sell-off.



Ten-year yields continued to rise as prices slipped, adding another two basis points to yesterday's 12-point surge at 3.57%.

"The market seems to believe that most of the bad news relating to credit losses is over," say Manqoba Madinane and Walter de Wet in today's Gold Market note from Standard Bank in Johannesburg, "[but] it remains to be seen if current Dollar strength and the equity market rebound have long legs.

"Gold Market participants are likely to be cautious ahead of Friday's non-farm payroll data release in the US . This figure has been a real market-mover over the past few months."

By the Morning Fix in London – set at $893.50 per ounce – physical Gold Bullion prices had recovered more than $18 of the week's $56 losses as gold dealers in India , Hong Kong and Singapore reported decent sales following Tuesday's 10-week low.

Indeed, "there's a shortage of Gold Bars, there's a supply squeeze at the moment," according to William Kwan at Phillip Futures in Singapore .

"We've seen demand from Indonesia , Thailand and some from Vietnam ," confirmed another local gold dealer. "We are still offering gold bars at a premium of 40 US cents an ounce, but it may go up to around 75.

"I don't remember when [the premium] last touched that level."

In India, the world's hungriest market for physical Gold Bullion , "demand was good yesterday [and] it can rise more if prices fall further," according to a dealer in Pune.

"Demand is good, but it is cautious buying," agreed another trader in New Delhi , also speaking to Reuters India.

Over in Tokyo, where the Nikkei stock index today surged by 4.1%, Japanese gold futures traded for Feb. 2009 rose 1.1% to equal $887 per ounce.

The US Dollar meantime continued to rise on the forex market, pushing the Japanese Yen back to a three-week low and knocking the European single currency back to $1.5535.

The Euro hit a new all-time record of $1.5905 on March 17th.

The Gold Price in Euros reached €571.03 per ounce at today's Morning Fix here in London , fully 1.3% above Tuesday's spot-market low.

Today's level of €562.50 matched almost exactly the peak of May 2006. That "cathedral top" then put a ceiling on the Euro Gold Price until Dec. 2007.

Back in today's markets the Pound Sterling also rose against the Euro on a raft of consumer borrowing data. For British investors looking to Buy Gold today, Sterling's bounce capped the price of bullion below £449 per ounce, a little more than 1.1% above yesterday's ten-week low but 23% off the all-time record of £512 per ounce hit on March 17th.

In the raw materials market today base metals slid yet again while soft commodity prices rose for the first time in a week.

The "panic sell-off" starting in mid-March saw food commodities drop one-quarter of their price. But the UBS-Bloomberg commodity index remains 30% above its level of this time last year, and to fend off the risk of social unrest, emerging economies are now "scrambling" to boost food imports and cap exports, notes the Financial Times today.

Saudi Arabia yesterday slashed its import tariff on wheat by 25%; India banned all rice exports except high-value basmati on Monday; Vietnam is looking to trim food exports by more than 10% in 2008.

Government agents in the Philippines this week raided store-houses suspected of hoarding rice, which has risen in price by one-third on world markets since the start of the year.

"The steps taken are bold," said the deputy chairman of India 's planning commission, Montek Singh Ahluwalia, to reporters today.

"They are not bits and pieces. Inflation will be handled. We will control it."

The Asian Development Bank warned today that inflationary pressures will persist in India for the next two to three months, and the World Bank said on Tuesday that rising food and fuel prices pose a bigger threat to East Asian economies than the ongoing US banking crisis.

Average inflation in Ukraine – a top 10 exporter of wheat – will hit 20-22% this year according to a new report from the International Monetary Fund.

Industrial output prices in Europe rose at their fastest pace in 18 months in Feb., the Eurostat agency said Wednesday morning, growing by 5.3% from Jan.'s upwardly revised rate of 5.0% in the 15-nation single currency zone.

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 2008

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