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
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
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Corrects After Novembers Surge as Dollar Strengthens

Commodities / Gold & Silver Dec 01, 2008 - 07:25 AM GMT

By: Adrian_Ash

Commodities WHOLESALE GOLD PRICES fell sharply in Asia and London on Monday, dropping 3.2% from Friday's best weekly close in eight and falling below $791 an ounce.

The six-day rally in global stock markets also stalled on a fresh surge in the US Dollar and Japanese Yen.


Government bond prices jumped on expectations of sharp cuts to Sterling and Euro interest rates later this week.

Warning that domestic credit is as tight now as during the worst of Japan's mid-90s' credit crunch, the Bank of Japan announced an emergency policy meeting for Tuesday.

"A cascading series of crises [could] fall upon us," said United Nations' secretary-general Ban Ki-Moon at a meeting in Doha, Qatar, this weekend, "each building on the last, with devastating social and political consequences for us all."

The UN now forecasts global economic growth of just 1% in 2009 – a "sub-par recession" marking the worst outlook since 1981.

"Virtually all" that growth will come from emerging and developing nations, Ki Moon said.

The ongoing stand-off between Thai police and anti-government protesters at Bangkok airport – now in its seventh day – stemmed earlier profit-taking in Gold sparked by a run of higher Baht prices, a dealer in Singapore told Reuters earlier.

Faced with their own fast-falling currency, "the Indonesians are also very active since the Rupiah dropped to 12,000 from 11,000 against the US Dollar," he added.

Gold Investment demand in Mumbai, India was "badly hit" by last week's terror attacks, reports Commodity Online, with the Bombay Bullion Association (BBA) reporting lost business worth up to $238 million equivalent.

On the international wholesale Gold Bullion market today, "December picked up where November ended as far as the metals are concerned," says the gold desk at Mitsui Bussan in Hong Kong.

"A good close in New York last Friday could not attract fresh buying [in Asia]. Sellers were probably those who bought before the weekend."

On the forex market this morning, the British Pound lost more than 3.5¢ to $1.50, capping the fall in gold for Sterling buyers at £527 an ounce.

Versus the Japanese Yen, the Euro lost 2.3% to reach a one-week low near ¥118, while the Dax index of German stocks lost 3.5% to trade just above 4,500.

The Gold Price in Euros fell €21 per ounce to €624.

" Gold has come sharply lower this morning, breaking last week's consolidation pattern," says today's Gold Market from Mitsui here in London, and "the US Dollar is strengthening as possible rate cuts outside of the United States dominate headlines.

"European and Chinese factory activity has sunk to a record low. Europe, Australia and Britain are all expected to come out with further sharp rate cuts this week in an attempt to resuscitate demand."

The Baltic Dry index, which measures the cost of shipping non-perishable solids, fell for the sixth month running in November, ending last week almost 95% below its record peak of late May at a 22-year low.

Today crude oil and the broader commodities complex fell sharply once more, pulling the Goldman Sachs Commodity Index (GSCI) almost 2.9% lower.

Mid-term government bonds jumped, meantime – pushing the yield offered to new buyers of 5-year bunds and gilts more than 0.12% lower – despite a UBS forecast that developed-world governments will issue $2.5 trillion in new bonds next year.

"Governments are already running into problems," says Roger Brown, head of global interest-rate research at the Swiss investment giant. "We do have to ask whether there will be enough investors to buy the bonds, or at the very least over whether this will push yields substantially higher to attract them."

Gold Mining output, in contrast, continues to shrink, with South Africa – the former world No.1 – reporting a 16.2% decline in third-quarter production from the same period last year.

Besides the energy supply problems which shut the entire South African mining industry in January, the Chamber of Commerce blames "downsizing in the gold mining industry and the significant impact of safety-related closures."

The average ore grade of South Africa's gold output – the density of gold particles per tonne of rock mined – fell by 3.7% between July and Oct.

Over in Reno, Nevada today, the world's largest gold miner company, Barrick Mining, will face a legal challenge from environmental and American Indian groups lobbying against its Cortex project in the Crescent Valley.

The project had been forecast to produce one million ounces of gold per year.

Here in London today, AIM-listed coal, gold and antimony group Cambrian Mining said it would cut overall production in a bid to reduce costs.

"Many gold mining groups around the world fritter away their margins on trying to find new sources of supply, wasting the money on exploration and expensive corporate activity," said fund manager Evy Hambro in Melbourne, Australia last week at the annual general meeting of his listed vehicle Global Mining Investments (GMI).

"I think shareholders want to see some of this margin coming back to them in the form of dividends, paying off debt and retained earnings. I think that is what people are really looking for to get Gold shares really moving again."

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