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
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
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 Hits $1000 as US Dollar and Stocks Sink, Crude Oil Hits $110

Commodities / Gold & Silver Mar 13, 2008 - 12:22 PM GMT

By: Adrian_Ash

Commodities SPOT GOLD PRICES Hit $1,000 per ounce in London on Thursday as the US Dollar sank to new record lows, oil traded further above $110 per barrel, and world stock markets sank.

"Concerns in the credit market, persistent Dollar weakness, and gradual acceleration of inflationary pressures is providing a foundation of support for gold," says James Steel of HSBC.

Only on Tuesday, Steele warned that the Federal Reserve's $200bn Aid Package for New York 's biggest banks would support the Dollar "and therefore weigh on Gold", calming financial markets and "reducing the need to purchase bullion as a safe haven."

But in Tokyo today the Nikkei stock index closed 3.3% lower as the Hang Seng in Hong Kong dropped 4.8%.

The FTSE100 here in London lost 1.8% at the opening after Carlyle Capital Corp. – a hedge fund run by the US Carlyle Group – said it expects creditors to seize all of its remaining $21.7bn portfolio of mortgage-backed investments.

The fund failed to meet margin calls from its brokers last week. Shares in CCC sank 70% at the Amsterdam stock exchange this morning.

"Carlyle's troubles have amplified fears that billions of dollars of depressed mortgage-backed securities will flood the market, reducing their value even further," notes Toby Anderson for the Associated Press.

Over on the currency markets today the Euro spiked above $1.56 to reach its 11th new lifetime high in the last 13 sessions.

The Dollar also sank against the Japanese Yen, dipping below ¥100 for the first time since the fall of 1995.

On the world's commodity markets, meantime, the sinking Dollar added fresh impetus to base metals, energy prices, and all soft commodities barring wheat.

"We are in the early stages of an extended bull market on commodities," reckons Christopher Wyke at Schroder Investment Management. "Depleting resources and environmental controls will further depress supply and push up prices.

"As the US currency falls, commodity prices – mainly quoted in US Dollars –will be attractive for Asian nations."

China and most south-east Asian economies remain "pegged" to the Dollar, importing inflation in the cost of living as they devalue their currencies to remain competitive on world export markets.

That's why in China "inflation is growing at its fastest pace in 11 years," notes Dan Denning of The Daily Reckoning today. "Chinese consumer prices were up 8.7% in February. Food costs were up a staggering 23%."

Most petro-rich states of the Opec oil cartel continue to peg their currencies to the US Dollar, too. Today US crude oil futures for delivery in April touched $110.70 per barrel, yet another fresh all-time record for the front-month contract.

Oil has broken a new record high every day this week, but "current market activity has nothing to do with spot fundamentals," reckons Tom James at Liquid Capital Markets in London .

"[The oil] market is now just struggling to absorb tens of billions of dollars of fresh, mainly long-only investment."

Tokyo gold futures meantime slipped 1.2% against the Japanese Yen today, but they rose almost $14 per ounce in US Dollar terms to equal $995.82.

And on the supply side this morning, South Africa 's official statistics agency confirmed that gold-mining output from the world No.2 fell 16.5% year-on-year in January, driven lower by the power shortages that closed the entire mining industry for five days late in the month.

Overall mineral production fell 10.7% from Jan. 2007. The gold-mining industry in South Africa is still only receiving 95% of normal energy supplies.

Last year the underlying trend in global gold-mining output – now shrinking fast thanks to surging costs, lower ore grades and a lack of new discoveries – cut South African production by 7.4%.

Global gold mining output fell by 1% in 2007 according to the GFMS consultancy. None of the top five gold-mining companies managed to increase their production.

Whereas the US money supply, in contrast, is now expanding by more than 15% year-on-year according to the Federal Reserve's MZM data series.

The world supply of Euros is growing by 11.5% year-on-year, while the United Kingdom has seen double-digit annualized growth in the Sterling money supply every month for the last two years running.


By Adrian Ash

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 , 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 - 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