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 Gains on US Stagflationary Economic Slowdown

Commodities / Gold & Silver Jul 31, 2008 - 07:56 AM GMT

By: Adrian_Ash

Commodities SPOT GOLD PRICES added to an overnight bounce at the New York opening on Thursday, rising above $915 per ounce on news of sharply higher US inflation and a slowing economy.

Gold had earlier recorded an AM Fix here in London of $912 per ounce – more than 2.1% above yesterday's five-week low – as crude oil slipped and the US Dollar held steady on the forex market ahead of today's data.


World stocks markets were also subdued, adding just 0.4% on average after a run of strong gains saw them reverse mid-July's near 4% losses.

On a monthly basis, the Morning Gold Fix in London averaged $941.53 per ounce in July, its second-highest price ever and almost 6% above June's average Gold Price .

"There's a very real chance Gold could trade above $1,000 an ounce by year-end," said Mark Bristow, CEO of African gold miner Randgold Resources in a phone interview with Thomson-Reuters today.

Reporting a 196% jump in second-quarter profits from the disastrous Q2 of 2007, Bristow said that a new record-high in the Gold Price would then look likely.

Also reporting results today, AngloGold Ashanti – the world's third-largest gold miner – announced a smaller loss for the second quarter, along with a dividend of 50¢ per share.

AngloGold mined 1.25 million ounces of gold between April and June, attributing the growth to better power supplies in South Africa . But it also bought back some 2.71 million ounces previously sold forward on its Gold Hedge Book .

Total cash costs rose by 30% from the second-quarter of last year to reach $434 an ounce.

Anglogold's Navachab Mine in Namibia now faces "an imminent blackout" says the local Informanté news site today, thanks to national power cuts threatened by a failed generating unit at the Koeberg Nuclear Station in neighboring South Africa.

"What you have to take a view on when you buy [gold mining] equities is management, operational and political risk," as Randgold chief Bristow said to MiningWeekly this spring.

"Equity's got a lot more leverage, but it is perhaps riskier."

Global gold-mining output slipped 5% in the first quarter of 2008 according to the latest data from GFMS, the London consultancy, on behalf of the World Gold Council (WGC).

Today in Hong Kong , the WGC launched the highly popular SPDR exchange-traded gold fund ( Gold ETF ) onto the local HKEx stock market.

"We have witnessed a significant increase in demand for Gold from Hong Kong investors," said CEO James Burton, "with demand for gold at the retail level more than doubling in 2007."

Meantime in Hanoi , Vietnam today, a raft of results from local Gold Dealers also showed strong growth. The Phu Nhuan Jewelry Co. saw turnover rise by 40% during the first-half of 2008.

Commercial bank Viet A attributed 45% of its total profit to Gold Trading according to the DTCK newswire.

Western banking groups, in contrast, continued to report poor second-quarter results today, with Germany 's Deutsche Bank announcing a fall of 64% in net profits from this time last year, led by a write-down in asset values worth €2.3 billion ($3.5bn).

"The second quarter of 2008 proved to be another very challenging quarter for the banking industry," said Josef Ackermann, Deutsche's CEO.

Last October, he forecast "substantial opportunities in investment banking after [summer 2007's] period of correction." ( Remember when Subprime Was Like, So Over ...? )

Back on the economic front today, the latest US gross-domestic product figures showed the economy growing by 1.9% annualized in the second quarter, down from 2.0% growth at the start of '08.

The GDP price deflator, meantime – a measure of cost-price inflation – jumped from 3.6% to 4.2% year-on-year.

Here in the UK this morning, the country's second-largest mortgage lender, Nationwide, reported a record drop in average house prices, down 1.5% over the last month alone.

The Eurozone's latest Consumer Price Index said annual inflation held at a 16-year high of 4.1% this month. Unemployment in the 15-member currency zone rose to 7.3%.

Friday brings Average Earnings data plus the latest US unemployment statistics.

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