Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Dow Short-term Trend Analysis - Coronavirus Trigger a Stocks Bear Market? - 24th Feb 20
Sustained Silver Rally Coming? - 24th Feb 20
Should Investors Worry about Repo Market and Buy Gold? - 24th Feb 20
Are FANG Technology Stocks Setting Up For A Market Crash? - 24th Feb 20
Gold Above $1,600 Amid FOMC Minutes and Coronavirus Impact - 24th Feb 20
CoronaVirus Pandemic Day 76 Trend Forecast Update - Infected 540k, Minus China 1715, Deaths 4920 - 23rd Feb 20 -
Ways to Find Startup Capital - 23rd Feb 20
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold Hold Steady at Start of Thin Summer Holiday Season

Commodities / Gold & Silver Jul 28, 2008 - 09:37 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE SPOT PRICE OF GOLD held inside a tight $5 range early Monday while the finance industry's summer vacation kicked off with a fresh drop in world equities.

Crude oil bounced $1.50 after losing 17% so far this month. The US Dollar fell to a three-session low vs. the Euro.


Government bond prices rose as investors sought the safety of fixed income, pushing two-year US municipal bond yields two basis points lower to 2.37% just ahead of the Wall Street opening – barely half the current rate of consumer-price inflation and down 0.4% from one month ago.

"There's a little bit of physical [gold] buying around," said Dick Poon at Heraeus in Hong Kong to Reuters today.

"People are delaying their purchases hoping for a fall of a few dollars," agreed a gold dealer at a private bank in India.

The world's hungriest market for physical gold, India has witnessed a 65% Drop in Gold Demand so far in 2008.

"The floundering state of physical [ Gold ] demand closely ties in with the market's expectation for activity in the seasonal calendar," says the latest Refining Monitor from Mitsui, the precious metals dealer in London.

Noting a marked slump in sentiment amongst the nine leading refining groups it surveyed, "June, July and August are typically quiet months and on balance have minimal impact on metal prices. The lack of optimism from our contributors – the lowest since October 2007 – is not altogether unsurprising."

Gold Prices surged by 31% in the five months after Oct. '07, hitting a peak of $1,032 per ounce in mid-March.

"Following the recent rush to own gold and in tandem with the swift price rise, the metal was due for a correction...We do not believe that gold is a sub $900 metal. However, in the current financial climate, it is necessary to absorb considerable pain before the metal finally breaks through $1,000 once again."

Over in the commodities markets early Monday, wheat prices rose sharply after Poland forecast a weak harvest following a dry June and wet July.

Consumer-price inflation and employment data are both due from the 15-nation Eurozone later this week. Monday morning brought news of a five-year low in German consumer confidence.

By lunchtime in Frankfurt, the Dax index of German equities stood more than 1% lower. The Gold Price in Euros ticked below €589 per ounce, little changed from Friday's close.

"Option strategies and option positions reflect the bullish outlook for the Gold Market ," believes Bill O'Neill at Logic Advisors in New Jersey, also speaking to Reuters today.

"The general view is that Gold does have an upside bias despite the setback in the last couple of days."

Last week's Commitment of Traders data from US regulators the CTFC showed a small reduction of 1.7% in the total number of Gold Futures & options contracts now outstanding.

As a group, large speculators (such as hedge funds) cut their bullish and bearish bets in equal measure. Small speculators (meaning private investors) slashed their short position by 17% to a one-month low.

Commercial traders working for refineries, gold miners, wholesalers and bullion banks remained 75% bearish overall. (They are, after all, in the business of selling gold.) But their holding of long contracts on the Gold Price rose almost 2% in the week-ending last Tuesday to reach a 10-week high.

"There are a lot of people who think that by the end of the year we'll be trading $1,200 to $1,500," says John Bilello, a floor trader at the Comex exchange. Since these gold options are now trading well out-of-the-money, "they are not very expensive, so people are buying them."

Just as stock-market analysts and traders try to begin the Summer Holiday Missed in 2007 , this week also brings the latest quarterly results from Britain's five largest banks, as well as earnings figures from the world's five biggest oil companies.

Lloyds TSB – which singularly avoided the more complex and riskier elements of the global credit bubble – kicks off the banking results on Wednesday. The worst drop is expected at HBOS – the UK's largest mortgage lender – where analysts forecast a two-thirds drop in net profit compared with April to June '07.

Oil-market analysts expect Exxon Mobil to report a 30% rise in net income to more than $13 billion on Thursday.

Today crude oil pushed 1.3% higher to $124.85 per barrel on news of fresh "militant" attacks in Nigeria, the world's eighth largest oil producer.

"This comes as the geopolitical risks flare elsewhere," said Rob Laughlin at MF Global to Bloomberg earlier, "with bombs in Istanbul and tough talking from Iran."

The BBC reports, however, that so-called "militants" in the Niger Delta are not coherent political groups. Instead, these heavily armed gangs regularly blow up key pipe-lines so that former oil-company employees can "hot-tap" supplies as part of a $60 million-a-day oil robbery.

The stolen supplies are shipped out to tankers waiting offshore, where they're mixed with legitimate cargoes.

Today a group calling itself the Indian Mujahideen claimed responsibility for a series of bomb attacks in Gujarat province at the weekend that killed 45 people. It killed 63 in Jaipur in May and declared "open war against India" over its support for US foreign policy.

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

6 Critical Money Making Rules