Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Stock Market Rescued by the Fed Again? - 24th Sep 21
Are Amazon Best Cheap Memory Foam Mattresses Any good? Bedzonline £69 4ft Small Double ECO Example - 24th Sep 21
Evergrande not a Minsky Moment - 24th Sep 21
UK Energy Firms Scamming Customers Out of Their Best Fixed Rate Gas Tariffs - 23rd Sep 21
Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Should School Children be Jabbed with Pfizer Covid-19 Vaccine To Foster Herd Immunity? - UK - 23rd Sep 21
HOW TO SAVE MONEY ON CAR INSURANCE - 23rd Sep 21
Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
Trading Crude Oil ETFs in Foreign Currencies: What to Focus On - 22nd Sep 21
URGENT - Crypto-trader event - 'Bitcoin... back to $65,000?' - 22nd Sep 21
Stock Market Time to Buy the Dip? - 22nd Sep 21
US Dollar Bears Are Fresh Out of Honey Pots - 22nd Sep 21
MetaTrader 5 Features Every Trader Should Know - 22nd Sep 21
Evergrande China's Lehman's Moment, Tip of the Ice Berg in Financial Crisis 2.0 - 21st Sep 21
The Fed Is Playing The Biggest Game Of Chicken In History - 21st Sep 21
Focus on Stock Market Short-term Cycle - 21st Sep 21
Lands End Cornwall In VR360 - UK Holidays, Staycations - 21st Sep 21
Stock Market FOMO Hits September CRASH Brick Wall - Dow Trend Forecast 2021 Review - 20th Sep 21
Two Huge, Overlooked Drains on Global Silver Supplies - 20th Sep 21
Gold gets hammered but Copper fails to seize the moment - 20th Sep 21
New arms race and nuclear risks could spell End to the Asian Century - 20th Sep 21
Stock Market FOMO Hits September Brick Wall - Dow Trend Forecast 2021 Review - 19th Sep 21
Dow Forecasting Neural Nets, Crossing the Rubicon With Three High Risk Chinese Tech Stocks - 18th Sep 21
If Post-1971 Monetary System Is Bad, Why Isn’t Gold Higher? - 18th Sep 21
Stock Market Shaking Off the Taper Blues - 18th Sep 21
So... This Happened! One Crypto Goes From "Little-Known" -to- "Top 10" in 6 Weeks - 18th Sep 21
Why a Financial Markets "Panic" May Be Just Around the Corner - 18th Sep 21
An Update on the End of College… and a New Way to Profit - 16th Sep 21
What Kind of Support and Services Can Your Accountant Provide? Your Main Questions Answered - 16th Sep 21
Consistent performance makes waste a good place to buy stocks - 16th Sep 21
Dow Stock Market Trend Forecasting Neural Nets Pattern Recognition - 15th Sep 21
Eurozone Impact on Gold: The ECB and the Phantom Taper - 15th Sep 21
Fed To Taper into Weakening Economy - 15th Sep 21
Gold Miners: Last of the Summer Wine - 15th Sep 21
How does product development affect a company’s market value? - 15th Sep 21
Types of Investment Property to Become Familiar with - 15th Sep 21
Is This the "Kiss of Death" for the Stocks Bull Market? - 14th Sep 21
Where Are the Stock Market Fireworks? - 14th Sep 21
Play-To-Earn Cryptocurrency Games Gain More and Is Set to Expand - 14th Sep 21
The CashFX TAP Platform - Catering to Bull Investors and Bear Investors Alike - 14th Sep 21
Why every serious investor should be focused on blockchain technology - 13th Sep 21
SPX Base Projection Reached – End of the Line? - 13th Sep 21
There are diverse ways to finance the purchase of a car - 13th Sep 21
6 Tips For Wise Investment - 13th Sep 21 - Mark_Adan

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Holds in 1% Range Ahead of Bernanke Speech; Inflation Threatens to Create "Penniless Billionaires"

Commodities / Gold & Silver Nov 08, 2007 - 09:12 AM GMT

By: Adrian_Ash

Commodities SPOT GOLD PRICES moved sideways in a broad 1% range early Thursday, dipping to $828 per ounce just ahead of the London opening before regaining $832 by lunchtime.


"It's important that we don't get over zealous at this point," says Brandon Lloyd for Mitsui in Sydney, pointing to the Gold Market 's 12-week run of rising prices to new 27-year highs, "especially given how quickly gold corrected from this level in 1980!"

"Technically, it is always prudent that we see a clean out in a rally to shake out the weak positions & ensure the rally is healthy. Unfortunately, there have been no signals that suggest a clean out is warranted.

"This makes an ardent bull bug like myself a little cautious."

On the foreign exchange market, the US Dollar slipped back after bouncing from new record lows overnight.

The Euro regained half-a-cent to approach $1.4700 once again. The British Pound held above $2.1050 – its own quarter-century high versus the Dollar – as traders correctly guessed the Bank of England would keep UK interest rates on hold at 5.75%.

"The Dollar cannot remain solely the problem of others [outside the US ]," said Nicholas Sarkozy, the French president, in a speech to Congress on Wednesday. "If we are not careful, monetary disarray could morph into economic war. We would all be its victims."

The European Central Bank also kept its rates on hold today, after Germany reported strong growth in its balance of trade for Sept. – denting hopes of a rate-cut to counter the Euro's current lifetime highs.

Ben Bernanke, chairman of the US Federal Reserve, will speak to the Joint Economic Committee at 11:00 EST today. After cutting US interest rates by 75 basis points since the global credit crisis began in August, he is expected to explain why he now says the balance of risks to inflation and economic growth are "balanced" – because the US bond market simply doesn't believe him.

"According to options analysis by the Cleveland Fed," reports the Financial Times this morning, "the market now sees a roughly 55% chance that the [US] central bank will cut another 50 basis points by the close of its January meeting, and an additional 15% chance that it will cut by 25 points by then."

The strong Pound capped the price of Gold in Sterling early today, holding 2% below yesterday's new record highs at £395 per ounce.

For French and German investors wanting to Buy Gold Today , the metal held below €570 in the first half of European trade.

"The stock market is getting crushed and that's why we're seeing a pullback in gold," reckons Robin Wilkin, chief technical analyst for J.P.Morgan's commodity and forex desks in London .

"It's all correlated."

But while the US stock market has now dropped more than 7% from its new all-time high of early October, the Gold Price has risen by 12% against the Dollar.

Gold Priced in Euros has gained more than 8% over the last five weeks. The top 100 shares in Europe , meantime, have dropped nearly 4% of their value on average.

"In the past, savers who wanted to avoid the problem of taking investment decisions and allocating their funds to different asset classes could keep their money in short term deposits," writes Dr.Marc Faber for AMEinfo.com today.

"But in today's new monetary regime – characterized by massive monetary and debt growth – savers are almost forced to invest into 'something' in order not to end up as 'penniless billionaires'."

The destruction of paper purchasing power rolled on in Thursday's early trading, as Asian stock markets dropped 2.8% for the day and bond yields continued to slide despite a fresh surge in commodity prices.

As the Wall Street open drew near, 10-year US Treasuries had been bid up to yield just 4.32%. Crude oil, on the other hand, bounced on news that a storm in the North Sea has forced ConocoPhillips and BP to shut-down 220,000 barrels per day of production.

"The oil market is being made more jittery by the storms in the North Sea ," said one London broker to Bloomberg this morning.

"With oil near $100, sentiment is unusually edgy."

Following on from the United Nations' warning that soaring food prices now threaten social unrest in developing countries, soybean prices were pushed higher after Argentina – the world's third-largest producer – raised export taxes on the oil-seed.

Wheat prices rose in South Africa , meantime, as the Rand slipped against the US Dollar.

The gold price for South African investors has continued to hit a series of new all-time highs since August. Trading above ZAR 5,100 per ounce, it has doubled in the last three years.

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 2007

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