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
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Rises on Weak US Jobs Data, Bull Market "Dependent" on Low US Rates

Commodities / Gold and Silver 2010 Dec 03, 2010 - 08:04 AM GMT

By: Adrian_Ash

Commodities

THE PRICE OF GOLD reversed an earlier dip towards yesterday's low of $1385 per ounce at the start of New York dealing on Friday, holding onto a sharp drop vs. the Euro as the single currency rose – and the Dollar fell – on news of much weaker than expected US jobs growth.

World equities had moved sideways – and major-economy government bonds fallen – but broad commodity markets rose, with US crude oil contracts pushing to fresh two-year highs above $88 per barrel.


Silver investing bars traded little changed around $28.80 per ounce, more than 7.2% up on the week.

"Strong demand for silver in China is evident in the $1.00 (and higher) premium silver is trading at in Shanghai," Standard Bank says today, also forecasting a possible 70% rise in China's gold investment demand for 2010 – whether "private and/or state".

"For us, the gold market exhibits clear signs of being an asset bubble," says the latest Commodities Weekly from French bank and London bullion dealer Natixis, noting that 10-year forward prices for gold contracts "are now approaching the highs achieved in the 1979-80 period" at $2000 per ounce.

"Gold prices have become detached from the cost of producing gold" by mining, says Natixis, and "Investment in new output is resulting in an increase in mine supply" of some 5% year-on-year.

"From the perspective of Chinese investors, [gold investment] is theoretically irrational," Natixis goes on, because rising price-inflation should suggest a fall – not impending rise – in the Yuan vs. the Dollar.

Continued gold buying only makes sense for US investors "as long as QE can keep long-term interest rates low" the bank's analysts say, while "from the perspective of European investors, [gold] is a safe-haven only as long as default risks exceed fiscal [austerity-budget] retrenchment."

Dropping to a 3-session low beneath €33,750 per kilo this morning, the spot gold price in Euros still neared the weekend 1.7% higher from last Friday's finish.

Frankfurt's Dax index of German stocks cut its week-on-week gains to 1.5%.

So-called "peripheral" Eurozone bond yields meantime fell further vs. benchmark German Bunds, extending the easing of comparative borrowing costs for Ireland, Portugal and other "non-core" governments which coincided on Thursday with the European Central Bank's latest policy statement.

"As [ECB chief] Trichet started to speak," says an un-named source to the FT's Alpha blog today, "his troops stepped into the market to buy as many peripheral bonds as they could, particularly Portugal and Ireland."

German Bund prices ticked lower however on Friday morning, nudging their interest-rate yields upwards and thus helping to cut the comparative excess paid on other government bonds.

"What happens next [in the physical gold bullion market] depends to a large extent on developments in the sovereign debt situation," says Heraeus Refining's head of sales, Wolfgang Wrzesniok-Rossbach, in his latest Precious Metals Weekly.

"Ireland is not (yet) Greece...not as far as physical gold investment demand in Germany is concerned."

Investor demand for gold bars – "especially the larger bars" – has nevertheless risen "considerably", says Wrzesniok-Rossbach, without reaching the peak volumes seen during the Lehmans' crisis of late 2008 and the Greek deficit crisis of May 2010.

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.


© 2005-2019 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