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
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
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Follows Oil and Euro Lower Ahead of FOMC Meeting

Commodities / Gold & Silver Apr 29, 2008 - 12:26 PM GMT

By: Adrian_Ash

Commodities THE PRICE OF PHYSICAL GOLD fell back in Asian and early London trade on Tuesday, undoing Monday's 1.1% gain as crude oil fell, stock markets were mixed, and government bonds ticked higher after the worst two weeks for US Treasuries since 1982.

"Everybody is waiting for the Fed," notes Ronald Leung of Lee Cheong Gold Dealers in Hong Kong . "I think Gold has to stay above these levels before it can charge higher again.


"The range is still the same at between $880 to $900 for today and tomorrow."

Gold Prices slipped today a three-session low of $886 per ounce at the AM Fix in London .

After slashing the cost of borrowing Dollars to almost minus 2.0% in real terms (after accounting for inflation), the Federal Reserve is expected to signal a pause after cutting another 0.25% off its key target rate on Wednesday.

"It's really a question of whether we are getting [enough] bang for the buck," said Dallas Fed president Richard Fisher – a dissenting voice at the last two Fed meetings – a week ago today.

"Clearly we're not. The system is sputtering."

But Bloomberg claims today that Fed chairman Ben Bernanke "is persuading investors that the financial markets are working again."

The newswire cites as evidence the 8.4% rally in the S&P stock index since the Bear Stearns rescue, plus last month's record sale of $45.3 billion in US corporate debt.

"In the near term, if [Bernanke] is a triage nurse, you have to say he's definitely stabilized the patient," says James Swanson, chief investment strategist of the $204bn funds at MFS Investment Management in Boston .

"That's what I'd call it, a triage nurse using radical procedures. But they worked. Whether they'll be proven right in the long run, I don't know."

The Fed's most radical remedy to date – the $29bn underwriting of J.P.Morgan's takeover of Bear Stearns in March – marks "the worst policy mistake in a generation," according to a former head of Fed monetary affairs.

Speaking at the American Enterprise Institute on Monday, Vincent Reinhart, who left the US central bank late in 2007, compared the current banking crisis – and the Fed's response – to both "the great contraction" of the 1930s' Great Depression and also "the great inflation" of the 1970s.

Back in the Gold Market , traders are "looking for further direction from the Fed meeting," said Gnanasekar Thiagarajan, at Commtrendz in Mumbai to the Economic Times of India today.

" Gold is not likely to make any significant moves before that."

But today's Nature Day holiday in Japan – followed by the looming May Day shutdown across continental Europe and Russia on Thursday – looks set to make for thin trade either side of the Fed's much-awaited decision.

"With technically neutral charts for the precious metals," adds Mitsui, the precious metals dealer, "it is difficult to see where the next move will come from."

"I think falling oil prices [have] triggered some selling," one Hong Kong Gold Dealer told Reuters this morning.

"We might see support at $880 level.

Crude oil dropped more than 1% to $117.85 per barrel Tuesday morning as the strike at Scotland 's Grangemouth refinery ended. A strike by senior staff in Nigeria continued to block production of 860,000 barrels per day for Exxon Mobil.

"People [also] started to Sell Gold because of a weakening Euro," the Hong Kong dealer went on. "The physical market is deserted after we saw pretty good demand from Southeast Asia yesterday."

The European single currency today sank to its lowest level since 4th April below $1.5540 after German and Euro-wide retail sentiment both showed a marked decline on the monthly Bloomberg purchasing managers' index.

That move kept the Gold Price in Euros in a tight range around €569 per ounce as the broad FTSE Eurofirst index of 300 blue-chip equities slipped 0.5%.

Germany 's largest bank, Deutsche, today reported its first quarterly loss in five years on credit-related write-downs of €2.7 billion ($4.2bn) in what the CEO, Josef Ackermann, called "the most difficult [market] in recent memory."

Across the world in Toyko, Daiwa Securities also booked its first quarterly loss in five years, losing $123.8 million in the first three months of this year thanks to credit-related losses.

Daiwa made $250m profit over the same period last year.

For British investors wanting to Buy Gold today, the price bounced to £449.50 per ounce from a two-day low of £446.15 as the Pound sank on news that UK mortgage approvals fell to the lowest number on record in March.

The Pound Sterling dropped 1.5¢ to $1.9730 after the Bank of England said the number of mortgages approved by UK banks last month fell 45% from March 2007.

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 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 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