Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and Silver Spike on Bernanke Speech

Commodities / Gold and Silver 2010 Oct 15, 2010 - 07:11 AM GMT

By: Adrian_Ash

Commodities

THE PRICE OF BOTH gold and silver bullion spiked sharply at the start of New York dealing on Friday, briefly nearing yesterday's record levels as Federal Reserve chairman Ben Bernanke spoke on monetary policy, and the US Dollar sank.

Failing to detail the size of quantitative easing now due – and admitting that policy-makers lack "experience" of its economic effects – Bernanke confirmed that the Fed is "prepared to provide additional accommodation if needed to support the economic recovery," in a speech on Boston.


Gold prices leapt to $1384 and silver touched $24.80 per ounce as the US Dollar fell towards new 2010 lows vs. the Euro.

The Dollar also re-touched Thursday's new 15-year lows to the Yen, but then rallied hard – alongside European equities and US stock futures – as gold and silver retreated.

New data meantime showed US consumer prices holding flat last month (excl. food and fuel) despite a near-5% fall in the Dollar's international exchange rate.

US retail sales showed a better-than-expected rise.

"Investment demand has become an essential component within the gold market," says the latest Metals Quarterly from Patrick Artus' team at French bank and London bullion dealer Natixis.

"While fears of recession, if not deflation persist, and while major central banks remain prepared to expand their balance sheets further through an additional round of quantitative easing, gold prices will continue to be supported.

"Competitive devaluation...is equally supportive for higher Gold prices."

A day after the central bank of India was seen buying Dollars and selling Rupees in the open market, "Heavy foreign fund flows" today buoyed the currency to a 25-month high vs. the Dollar, says the Economic Times.

So-called "hot money" is also pouring into China, a Beijing official is quoted today by the People's Daily.

The Obama administration in Washington is set to announce whether or not it believes China is a "currency manipulator" deserving trade sanctions.

"What could ultimately undermine gold's allure would be a gradual return to economic normality, as sovereign entities bring their financial houses back into order through fiscal retrenchment rather than monetary expansion," says Natixis.

Shorter-term, "Gold doesn't look overextended" with regards to speculative buying on the New York derivatives markets, says Walter de Wet at Standard Bank in a note today.

Comparing the "net long" position of non-industry players against the total number of open contracts in various commodity markets, "Silver has a net non-commercial long position as percent of open interest of 26.4%," he says, "well above the average of 21.8% seen over the past two years.

"Nymex crude's position is at 7.12%, compared to a 2-year average of 4.6%. The much less liquid Comex copper spec' position as percent of Open Interest is currently 15%, compared to a 2-year average of 9%.

"The similar figure for gold is 32.4%, compared to a two-year average of 32.6%."

The Gold/Silver Ratio fell Thursday to a new 26-month low, meaning that one ounce of gold was worth a little over 56 ounces of silver.

"The market remains bullish gold," says technical analyst Russell Browne at bullion-bank Scotia Mocatta, "but we are not ready to pick the bottom on this great bearish [Gold/Silver] ratio trade."

By Adrian Ash

BullionVault.com

Gold price chart, no delay   |   Buy gold online at live prices

Formerly 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 2010

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.


© 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