Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Further Gold Price Pressure as the USDX Is About to Rally - 23rd Oct 20
Nasdaq Retests 11,735 Support - 23rd Oct 20
America’s Political and Financial Institutions Are Broken - 23rd Oct 20
Sayonara U.S.A. - 23rd Oct 20
Economic Contractions Overshadow ASEAN-6 Recovery - 23rd Oct 20
Doji Clusters Show Clear Support Ranges for Stock Market S&P500 Index - 23rd Oct 20
Silver Market - 22nd Oct 20
Goldman Sachs Likes Silver; Trump Wants Even More Stimulus - 22nd Oct 20
Hacking Wall Street to Close the Wealth Gap - 22nd Oct 20
Natural Gas/UNG Stepping GAP Patterns Suggest Pending Upside Breakout - 22nd Oct 20 -
NVIDIA CANCELS RTX 3070 16b RTX 3080 20gb GPU's Due to GDDR6X Memory Supply Issues - 22nd Oct 20
Zafira B Leaking Water Under Car - 22nd Oct 20
The Copper/Gold Ratio Would Change the Macro - 21st Oct 20
Are We Entering Stagflation That Will Boost Gold Price - 21st Oct 20
Crude Oil Price Stalls In Resistance Zone - 21st Oct 20
High-Profile Billionaire Gives Urgent Message to Stock Investors - 21st Oct 20
What's it Like to be a Budgie - Unique in a Cage 4K VR 360 - 21st Oct 20
Auto Trading: A Beginner Guide to Automation in Forex - 21st Oct 20
Gold Price Trend Forecast into 2021, Is Intel Dying?, Can Trump Win 2020? - 20th Oct 20
Gold Asks Where Is The Inflation - 20th Oct 20
Last Chance for this FREE Online Trading Course Worth $129 value - 20th Oct 20
More Short-term Stock Market Weakness Ahead - 20th Oct 20
Dell S3220DGF 32 Inch Curved Gaming Monitor Unboxing and Stand Assembly and Range of Movement - 20th Oct 20
Best Retail POS Software In Australia - 20th Oct 20
From Recession to an Ever-Deeper One - 19th Oct 20
Wales Closes Border With England, Stranded Motorists on Severn Bridge? Covid-19 Police Road Blocks - 19th Oct 20
Commodity Bull Market Cycle Starts with Euro and Dollar Trend Changes - 19th Oct 20
Stock Market Melt-Up Triggered a Short Squeeze In The NASDAQ and a Utilities Breakout - 19th Oct 20
Silver is Like Gold on Steroids - 19th Oct 20
Countdown to Election Mediocrity: Why Gold and Silver Can Protect Your Wealth - 19th Oct 20
“Hypergrowth” Is Spilling Into the Stock Market Like Never Before - 19th Oct 20
Is Oculus Quest 2 Good Upgrade for Samsung Gear VR Users? - 19th Oct 20
Low US Dollar Risky for Gold - 17th Oct 20
US 2020 Election: Are American's ready for Trump 2nd Term Twilight Zone Presidency? - 17th Oct 20
Custom Ryzen 5950x, 5900x, 5800x , RTX 3080, 3070 64gb DDR4 Gaming PC System Build Specs - 17th Oct 20
Gold Jumps above $1,900 Again - 16th Oct 20
US Economic Recovery Is in Need of Some Rescue - 16th Oct 20
Why You Should Focus on Growth Stocks Today - 16th Oct 20
Why Now is BEST Time to Upgrade Your PC System for Years - Ryzen 5000 CPUs, Nvidia RTX 3000 GPU's - 16th Oct 20
Beware of Trump’s October (November?) Election Surprise - 15th Oct 20
Stock Market SPY Retesting Critical Resistance From Fibonacci Price Amplitude Arc - 15th Oct 20
Fed Chairman Begs Congress to Stimulate Beleaguered US Economy - 15th Oct 20
Is Gold Market Going Back Into the 1970s? - 15th Oct 20
Things you Should know before Trade Cryptos - 15th Oct 20
Gold and Silver Price Ready For Another Rally Attempt - 14th Oct 20
Do Low Interest Rates Mean Higher Stocks? Not so Fast… - 14th Oct 20
US Debt Is Going Up but Leaving GDP Behind - 14th Oct 20
Dell S3220DGF 31.5 Inch VA Gaming Monitor Amazon Prime Day Bargain Price! But WIll it Get Delivered? - 14th Oct 20
Karcher K7 Pressure Washer Amazon Prime Day Bargain 51% Discount! - 14th Oct 20
Top Strategies Day Traders Adopt - 14th Oct 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

New Bull Market in Stocks NOT Possible

Commodities / Gold & Silver 2009 May 01, 2009 - 06:58 AM GMT

By: Adrian_Ash


WHOLESALE PRICES for physical gold slipped to an eight-session low early in London on Friday, dropping 4.1% from Monday's start before rallying to $885 an ounce as the US Dollar also bounced on the currency markets.

The Gold Price in Euros headed for its worst weekly finish in four after the single currency broke above $1.33, while the Frankfurt and Paris bourses were closed for May Day.

In Japan – where new consumer-price data today showed a drop back into deflation – the Nikkei index ended Friday 3.1% better from Monday, and 10% stronger from April 1st. Tokyo is now closed until Wednesday for Golden Week.

And ahead of the long Bank Holiday weekend here in London, the FTSE100 held near its best level since mid-Feb., up 20% from mid-March's six-year low.

"It is difficult, but not impossible, to argue that we are in a new bull market" for stocks, says market-historian and sentiment-analyst Mark Hulbert at MarketWatch.

"[But] it is more likely that we're in a bear-market rally."

"Although we are not (yet) witnessing a US Dollar crisis," writes Stern Business professor Nouriel Roubini under the moniker "Doctor Doom" in Forbes magazine, "the Bretton Woods II system is still at the center of the debates on the origins of this financial crisis.

"Stimulus spending by trade-deficit countries such as the US and UK will only accentuate pressure on global fiscal deficits and imbalances," says Roubini, while "Chinese concerns about the long-term value of its US assets have increased," leading it to raise the share of gold in its vaults "from a very low share of total assets."

Now standing 75% higher from 2003 at 1,054 tonnes agrees Wolfgang Wrzesniok-Rossbach in the latest Precious Metals Weekly from German refining group Heraeus, "China now has the fifth biggest gold reserves in the world, but even that is only 1.5% of the country’s currency reserve."

Pointing to this week's comments from Nout Wellink of the European Central Bank, "the Dutch member of the ECB board announced that there would again be an agreement to regulate the member central banks' gold activities" when the current deal – signed in 2004 – expires this coming Sept.

"However," Wrzesniok-Rossbach adds, " one has to wait and see what this agreement will look like – whether the IMF, with its Gold Sales plans will be a signatory, and whether the central banks who are already finished with their sales (e.g. Switzerland) will again be part of this.

"It will also be interesting to know the annual quantities that will be available for possible sales. [Because] in the current year of the existing agreement, the central banks have so far sold a mere 91 tonnes from an possible annual maximum of 500 tonnes."

Back in the spot market today, the technical outlook for Gold Prices puts support at $880 according to Mitsui analysts in London, with resistance at $900 an ounce.

Looking at the monthly charts, "The correlation between oil and Gold Prices has been extremely high since 2004 and has only just begun to come down," says Phil Smith for Reuters Technical India.

"If you are looking for more substantial upside on gold, note that the last time this correlation broke down was during the 2000 to 2003 stock market sell off."

Today in the debt markets, US Treasury bonds slipped once again, even as Japanese and UK government bonds ticked higher.

The Federal Reserve bought $3.0 billion of Treasuries in the open market as part of its $1.25 trillion "Quantitative Easing" on Thursday, but 10-year bonds still fell, pushing the yield up to a five-month closing high of 3.11%.

Ahead of next week's European monetary-policy meeting, "The ECB has spent a long time pondering its next move on non-standard easing," says Steven Barrow for Standard Bank in a note today.

"For once, we want to lean with the view that the ECB just might deliver a bit more than the market expects – and deliver a weaker Euro into the bargain."

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 2009

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

6 Critical Money Making Rules