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

Asian Gold Traders Buy the Dips as Global Devaluation Makes Currency Crisis Possible

Commodities / Gold and Silver 2010 Mar 26, 2010 - 09:37 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD rose in Asia and London on Friday morning, briefly touching $1100 per ounce before slipping back with the Euro after European political leaders agreed a rescue strategy for Greece in Brussels.

"I think we might get a little bit of a recovery in the Euro, which will help gold prices," said Darren Heathcote at Investec Australia to Reuters earlier.


Gold and the Euro typically move together vs. the Dollar, becoming more closely correlated than gold and silver on 15 separate occasions in the last five years.

Silver also cut its early gains as the New York opening drew near today, slipping back from $17.00 to $16.81 an ounce.

"We've seen physical [gold] buybacks in the market," said refinery group Heraeus' Hong Kong manager Dick Poon overnight, "and not only in Hong Kong."

"Physical traders were happy to buy the dips."

Commodity prices also ticked higher early Friday, pushing US crude oil contracts north of $81 per barrel.

European stock markets fell, however, while German Bunds eased further and Greek bonds rose.

Athens will now get emergency funds of some €23bn – two-thirds paid by other Eurozone members, and one-third by the Washington-based International Monetary Fund – if Greece fails to fund its €54bn public debt on the bond market.

"I cannot imagine [German] judges would step in" to block the IMF's involvement as breaching EU rules, reckons Professor Ulrich Haede at the University of Frankfurt, speaking to BusinessWeek.

European leaders also agreed overnight to give what the British press calls "sweeping powers" to unelected European president Hermann von Rompuy – the Western world's highest paid political leader, on €1000 per day.

The powers "to strengthen the coordination and surveillance of budgetary discipline [and] to set out economic policy guidelines" simply invoke existing clauses in the Lisbon Treaty signed in 2007, however.

Looking at Eurozone monetary policy, "Economic weakness and low inflation, in conjunction with the debt strains, will – at a minimum – leave the ECB on hold all year," says Steven Barrow, chief currency strategist at Standard Bank, today.

"Even if rates are not cut, we still feel that the ECB's policy does the Euro few favors, as it has shown that it is prepared to deviate slightly from its mandated monetary policy course, in order to offer its backing for Greece."

"The underlying problems of heavily indebted economies are [still] weighing heavily on the single currency," says Andrey Kryuchenkov at VTB Capital in London.

"The Euro will still suffer and could still drag gold a tad lower."

However, "The measures that were taken to bail-out countries from the financial crisis led to a fiscal crisis, and a currency crisis can possibly erupt," says Avinash Persaud, professor emeritus at London's Gresham College, and an expert advisor to the UK, France, IMF, OECD and United Nations.

"The US and the UK have no other option other than having weak currencies," he tells the Press Trust of India in an interview.

"In fact, the US has a Dollar de-valuation policy."

"The economy continues to require the support of accommodative monetary policies," repeated Fed chairman Ben Bernanke in Congressional testimony on Thursday.

"I keep expecting a normalization, but the market is convinced the Fed is not going to do it," says Bianco Research strategist Howard Simons in Chicago to Fortune magazine.

Slightly better than tossing a coin with a 57% strike rate, Bloomberg's latest survey of professional traders, analysts and investors says 10-out-of-20 now expect gold prices to fall next week.

"Six forecast higher prices and four were neutral," says the newswire.

From a technical standpoint, Dollar gold prices "are still below the long-term up-trendline (starting Oct. 2008) which has been broken in the past few days," writes Filippo Finocchi from the trading desk at Italian bullion suppliers Italpreziosi in Arezzo.

"If gold continues its run higher, the trendline could be firm resistance."

Adrian Ash

By Adrian Ash
BullionVault.com

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
Formerly 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 2010

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.


© 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

6 Critical Money Making Rules