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 Hold Recent Advance in Thin European Trade

Commodities / Gold & Silver Jul 04, 2008 - 08:30 AM GMT

By: Adrian_Ash

Commodities SPOT GOLD PRICES drifted in thin trade on Friday, bouncing off yesterday's low at $930 per ounce as crude oil ticked down and the US Dollar held flat after Thursday's 1.2% jump. New York was closed for the long Independence Day weekend.

" Gold is still holding onto its recent extreme gains very well," noted the Mitsui team here in London this morning.


"[But] from here we would have to point out that the resistance in gold at $945 remains very much a barrier to higher prices for now."

Three times this week the Gold Price broke but failed to hold above $945 per ounce – a level it briefly held for two days in mid-April when retreating from the all-time record high of $1,032 touched on March 17th.

With New York now closed for the Fourth of July holiday, gold-dealing in London was "quiet and lacking movement," according to one dealer. Thursday's near 2% drop came after the European Central Bank (ECB) in Frankfurt Raised Euro Interest Rates for the first time in 13 months, but signaled a pause before it takes any further action to calm the currency zone's 16-year record in consumer-price inflation.

In Ireland – where real interest rates have been below zero since 1999 – the Irish Independent warned that the 0.25% rate hike will cost home-buyers and borrowers €1 billion in extra lending fees.

Today the Gold Price in Euros held steady at €594 per ounce.

"This week's rally in Gold was driven by a series of factors," says Wolfgang Wrzesniok-Rossbach at Heraeus, the German refining group.

He cites "the rising oil price...a very strong Euro against the US Dollar...further weak US economic indicators...[and] increased sabre-rattling between the West and Iran because of the mullah regime's nuclear program."

Today crude oil slipped $1 from near record levels after the government in Tehran told Washington today it may be willing to discuss "common ground" over Iran 's on-going nuclear development program.

European banking stocks meantime dropped on a series of downgrades from analysts at Goldman Sachs, knocking the Cac 40 index in Paris towards its 17th weekly loss for 2008 so far.

Government bond prices rose across Asia and Europe , in contrast, pushing longer-term interest rates lower and confirming the "inverted yield curve" on UK gilts.

With long-dated debt now offering investors lower income than near-term bonds, the market suggests a severe economic slowdown may be due.

Today the FTSE100 lost 1% of its value to touch a fresh 32-month low after Bradford & Bingley – the UK 's eighth largest bank, and a specialist in "buy-to-let" loans to small real-estate investors – admitted that a crucial £400m capital raising fell through last night.

TPG Capital, a US private equity group, pulled out of the deal after B&B's credit rating was downgraded by Moody's late Thursday.

Under an emergency deal brokered by City watchdog the Financial Services Authority, B&B's largest shareholders – led by pension and insurance funds Legal & General, M&G and Standard Life – then said they would accept a new rights issue at 55p per share.

But losing 10% for the day, however, B&B's share price today dipped below that level, putting the new rescue in doubt.

"There is a very real risk that achieving £400m of funding at 55p will not be possible," said one analyst to the Financial Times this morning.

"B&B is a binary situation: either it is worth zero or materially more than the current market value."

The bank has now lost 86% of its value over the last 52 weeks.

Over in India – the world's No.1 retail market for physical Gold – "there is no demand but there are a lot of investors selling," said one wholesaler in Mumbai to Reuters this morning.

"Investment bars are being sold mainly by those who have taken a hit in stocks," he added.

India 's BSE stock index has now lost one-third of its value since the all-time records of early January.

The Hang Seng index of Chinese stocks today closed the week almost 3% lower, while over in Tokyo this morning – where the Nikkei stock index has dropped 13% so far this year – Gold futures ticked 0.3% lower today to finish Friday at ¥3,235 per gram.

Equal to $943 per ounce, however, that was Gold 's best weekly close on the Tocom exchange in Tokyo since the 24-year high of mid-March.

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