Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Volatile as Bear Market Grips Stocks

Commodities / Gold & Silver Jul 08, 2008 - 11:07 AM GMT

By: Adrian_Ash

Commodities

THE PRICE OF GOLD surged and then fell back in yet more volatile trade early Tuesday, regaining all of yesterday's 1.9% drop before slumping $14 per ounce.

The Gold Price then picked up again as world stock markets sank, oil prices ticked below $140 per barrel, and government bonds rose further.


"Renewed inflationary concerns and geopolitical tensions, especially with respect to the Middle East ...lead to a bullish outlook," says Standard Bank in Johannesburg in a series of notes on the metals & commodity markets today.

"Although we believe the US dollar remains the main driver of gold investment, underlying credit risk should support precious metal prices and, in particular, the Gold Price ."

Citing the 25% drop in bullish gold contracts held by non-commercial traders on US futures market since the record high of late Feb., "there is [now] scope for more speculative strength," the bank concludes.

Looking at Monday's late bounce in the US Gold Market , "support for gold was found at the 100-day moving average of $915 per ounce," noted the team at Mitsui, the precious metals dealer, here in London this morning.

"Silver is moving perfectly in line, with support also at the 100-day moving average. [But] platinum has dropped below its upward trend line from the start of the year.

"With the last three days progressively lower and so below the 100-day moving average level (now $2031), the platinum market may be starting to run out of steam."

Crude oil today slipped further below $140 per barrel, even as political leaders from the world's G8 economies continued to discuss global energy demand, supply and prices at their conference in Hokkaido , Japan .

"As for currencies, there were opinions that cooperation among not only G8 countries but also with emerging economies is needed," said a Japanese official to reporters after an official press release urged "some" emerging nations to let their currencies rise freely on the forex market.

That was taken as a thinly veiled reference to China , which has a large and growing Trade Surplus with the US .

The Chinese Yuan has risen by more than 10% against the US Dollar over the last 12 months, but the People's Bank of China continues to cap its daily gain to just 0.5% whilst also setting a "central parity" target.

Today the US Dollar was little changed against the Yuan at CHY6.862. But it capped the Euro below $1.5750 and held the British Pound beneath $1.9800 after a White House spokesman reiterated President Bush's faith in a " Strong Dollar Policy ".

That helped leave the Gold Price for European and UK investors little changed from Monday's US close at €588 and £467 respectively.

Meantime in Tokyo , the Nikkei stock index dropped another 2.5% while Tocom gold futures held steady near their recent four-month highs, equivalent to $937 per ounce.

A further 3% drop in Hong Kong shares, plus a 1.5% drop in European bourses – led by French auto-maker Peugeot Citroen warning of "free falling" sales that have "nose-dived" – took the MSCI index of global equity markets into "bear market" territory, pulling it more than one-fifth below the recent top of Nov. '07.

"Commodity markets are performing strongly, as opposed to poorly performing equity markets," said Robin Bhar, head of metals trading at Calyon – Europe 's third largest bank – to Thomson-Reuters earlier this morning.

"The money coming out of equities has to go somewhere. It is prudent to employ some of that in commodities, and more specifically in the Gold Market ."

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

© 2005-2022 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