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 Continues Healthy Consolidation Before Next leg Higher

Commodities / Gold & Silver Apr 23, 2008 - 02:23 PM GMT

By: Mark_OByrne

Commodities Best Financial Markets Analysis ArticleGold remains in lockdown and is range bound in a narrow channel between $910 and $926. A close above or below this channel will likely see gold test support at $880 or challenge resistance at $950 (see Technical Analysis below).

Gold was up $7.40 to $922.10 per ounce in trading in New York yesterday and silver was up 27 cents to $17.61 per ounce. The London AM Gold Fix at 1030 GMT this morning was at $916.25, £ 459.50 and €573.95 (from $ 920.75, £464.21 and €576.98  yesterday).


Stagflation is clearly a real threat as inflation appears to be accelerating and growth is clearly slowing. While gold has yet to respond to oil's recent surge and the dollar's record low against the euro, it would be prudent to focus on the medium and long term. We believe gold's historic correlation with the oil price will be reasserted in the coming days as gold plays catch up with oil. The historic ratio of gold to oil is 15 barrels of oil to 1 ounce of gold. Thus, if the ratio is reasserted as we strongly believe it will then we should see gold trade at some 15 times a barrel of oil or at today's prices (15 X 115) some $1,725 per ounce. Importantly gold tends to vastly outperform oil towards the end of their respective bull markets as oil is more subject to demand destruction than gold. Unlike gold, oil is not a finite currency used as a safe haven asset and store of wealth.

The financial crisis is continuing to spread to the wider economy as the woes of Wall Street are now clearly being felt on Main Street.

The slump in the U.S. housing market could cause prices to fall substantially more than they did in the Great Depression. Yale University economist Robert Shiller has said there's a good chance housing prices will fall further than the 30 percent drop in the historic depression of the 1930s. The U.S. in the 1930's was the largest creditor nation in the world, unlike today.

Home prices in the U.S. already have dropped 15 percent since their peak in 2006. It is worth remembering that house prices in Japan fell by nearly 90% between 1990 and 2006. This was a low painful decline and there was no banking and credit crisis as there is today.  Also, Japan's largest trading partner, the U.S. was in a far sounder fiscal and financial position then it is today – with the U.S. being the world's largest debtor nation and suffering from massive financial imbalances in the budget, trade and current account deficits .
23-Apr-08 Last 1 Month YTD 1 Year 5 Year
Gold $     
915.95
-0.34%
9.91%
32.78%
176.55%
Silver      
17.65
2.81%
19.52%
25.92%
282.95%
Oil     
117.80
15.67%
18.78%
79.24%
342.02%
FTSE      
6,047
10.03%
-6.03%
-6.68%
52.65%
Nikkei     
13,579
8.78%
-11.29%
-22.20%
74.24%
S&P 500      
1,376
3.49%
-6.29%
-7.09%
49.71%
ISEQ      
6,107
-0.84%
-11.93%
-37.05%
44.71%
EUR/USD     
1.5962
3.44%
9.44%
17.54%
45.73%
© 2008 GoldandSilverInvestments.com


Gold Continues to Outperform All Currencies including Sterling
As pointed out yesterday, many investors, advisers and others in the financial media incorrectly assume that gold's strength is purely a function of dollar weakness. Nothing could be further from the truth. Dollar weakness is just one of the myriad of strong fundamental factors driving the gold price as seen in the Gold/ GBP chart.


http://www.research.gold.org /prices/daily/

Technical Analysis
Outlook

Gold should hold trend support at $893 through this period of consolidation. As the period of consolidation extends the moving average continues to rise currently $818 up from $797 at the beginning of the month. This period of consolidation is healthy as trading at a significant distance from a long term  moving average is unsustainable in the long term. The difference between the spot price and the 200 day moving average should continue to close and help the metal form a base for the next leg higher in the bull market.

Failure to hold trend support at $893 opens the way for a deeper correction testing the April 1st low at $870 and a further retest of the $848 support of 22nd of Jan. On the upside resistance remains at the recent $953/954 high of April 17. This topside resistance is forming a rising triangle which should be bullish long term but it could require a longer period of consolidation at these levels before gaining momentum to break to the upside. Confirmation of the upside break would given on a close above $955/960 and should pave the way for a retest of the all time nominal highs at $1033. However, notwithstanding a major market event, this will unfold more gradually than before as it should be underpinned by the strong fundamentals of the market rather than just the irrational speculative exuberance in the derivatives market seen in March. This will be very positive for the long term as fast money tends to distort normal market behaviour.



Prices to Watch
$922 - 100 Day Moving Average

$818 - 200 Day Moving Average

$848 – Support 22nd Jan and Resistance previously 8th Nov

$893 – rising trend support

$954 – resistance from 21st Feb, 26th Mar and 17th Apr

Silver
Silver is trading at $17.52/17.58 per ounce at 1215 GMT.

PGMs

Platinum is trading at $2005/2015 per ounce (1215 GMT).
Palladium is trading at $448/453 per ounce (1215  GMT). 

By Mark O'Byrne, Executive Director

Gold Investments
63 Fitzwilliam Square
Dublin 2
Ireland
Ph +353 1 6325010
Fax  +353 1 6619664
Email info@gold.ie
Web www.gold.ie
Gold Investments
Tower 42, Level 7
25 Old Broad Street
London
EC2N 1HN
United Kingdom
Ph +44 (0) 207 0604653
Fax +44 (0) 207 8770708
Email info@www.goldassets.co.uk
Web www.goldassets.co.uk

Gold and Silver Investments Ltd. have been awarded the MoneyMate and Investor Magazine Financial Analyst of 2006.

Mission Statement
Gold and Silver Investments Limited hope to inform our clientele of important financial and economic developments and thus help our clientele and prospective clientele understand our rapidly changing global economy and the implications for their livelihoods and wealth.
We focus on the medium and long term global macroeconomic trends and how they pertain to the precious metal markets and our clienteles savings, investments and livelihoods. We emphasise prudence, safety and security as they are of paramount importance in the preservation of wealth.

Financial Regulation: Gold & Silver Investments Limited trading as Gold Investments is regulated by the Financial Regulator as a multi-agency intermediary. Our Financial Regulator Reference Number is 39656. Gold Investments is registered in the Companies Registration Office under Company number 377252 . Registered for VAT under number 6397252A . Codes of Conduct are imposed by the Financial Regulator and can be accessed at www.financialregulator.ie or from the Financial Regulator at PO Box 9138, College Green, Dublin 2, Ireland. Property, Commodities and Precious Metals are not regulated by the Financial Regulator

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. Past experience is not necessarily a guide to future performance.

All the opinions expressed herein are solely those of Gold & Silver Investments Limited and not those of the Perth Mint. They do not reflect the views of the Perth Mint and the Perth Mint accepts no legal liability or responsibility for any claims made or opinions expressed herein.

Mark O'Byrne 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