Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
Will Biden’s Neo-Populist Economic Doctrine Support Gold? - 25th Sep 21
Markets Deflationary Winds Howling - 25th Sep 21
Crude Oil Price Piercing the Sky: Where Will We See the Black Gold by Xmas? - 25th Sep 21
Cryptocurrency policy choices and consequences - 25th Sep 21
The Next Emma Raducanu UK Tennis Star Pleasing the Crowds at Millhouses Park Sheffield - 25th Sep 21
Stock Market Rescued by the Fed Again? - 24th Sep 21
Are Amazon Best Cheap Memory Foam Mattresses Any good? Bedzonline £69 4ft Small Double ECO Example - 24th Sep 21
Evergrande not a Minsky Moment - 24th Sep 21
UK Energy Firms Scamming Customers Out of Their Best Fixed Rate Gas Tariffs - 23rd Sep 21
Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Should School Children be Jabbed with Pfizer Covid-19 Vaccine To Foster Herd Immunity? - UK - 23rd Sep 21
HOW TO SAVE MONEY ON CAR INSURANCE - 23rd Sep 21
Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
Trading Crude Oil ETFs in Foreign Currencies: What to Focus On - 22nd Sep 21
URGENT - Crypto-trader event - 'Bitcoin... back to $65,000?' - 22nd Sep 21
Stock Market Time to Buy the Dip? - 22nd Sep 21
US Dollar Bears Are Fresh Out of Honey Pots - 22nd Sep 21
MetaTrader 5 Features Every Trader Should Know - 22nd Sep 21
Evergrande China's Lehman's Moment, Tip of the Ice Berg in Financial Crisis 2.0 - 21st Sep 21
The Fed Is Playing The Biggest Game Of Chicken In History - 21st Sep 21
Focus on Stock Market Short-term Cycle - 21st Sep 21
Lands End Cornwall In VR360 - UK Holidays, Staycations - 21st Sep 21
Stock Market FOMO Hits September CRASH Brick Wall - Dow Trend Forecast 2021 Review - 20th Sep 21
Two Huge, Overlooked Drains on Global Silver Supplies - 20th Sep 21
Gold gets hammered but Copper fails to seize the moment - 20th Sep 21
New arms race and nuclear risks could spell End to the Asian Century - 20th Sep 21
Stock Market FOMO Hits September Brick Wall - Dow Trend Forecast 2021 Review - 19th Sep 21
Dow Forecasting Neural Nets, Crossing the Rubicon With Three High Risk Chinese Tech Stocks - 18th Sep 21
If Post-1971 Monetary System Is Bad, Why Isn’t Gold Higher? - 18th Sep 21
Stock Market Shaking Off the Taper Blues - 18th Sep 21
So... This Happened! One Crypto Goes From "Little-Known" -to- "Top 10" in 6 Weeks - 18th Sep 21
Why a Financial Markets "Panic" May Be Just Around the Corner - 18th Sep 21
An Update on the End of College… and a New Way to Profit - 16th Sep 21
What Kind of Support and Services Can Your Accountant Provide? Your Main Questions Answered - 16th Sep 21
Consistent performance makes waste a good place to buy stocks - 16th Sep 21
Dow Stock Market Trend Forecasting Neural Nets Pattern Recognition - 15th Sep 21
Eurozone Impact on Gold: The ECB and the Phantom Taper - 15th Sep 21
Fed To Taper into Weakening Economy - 15th Sep 21
Gold Miners: Last of the Summer Wine - 15th Sep 21
How does product development affect a company’s market value? - 15th Sep 21
Types of Investment Property to Become Familiar with - 15th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Price Capped by Greece Debt Crisis

Commodities / Gold and Silver 2010 Apr 22, 2010 - 09:00 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD fell hard against the Dollar as New York opened for business on Thursday, sliding 1.4% from yesterday's high as US stocks also dropped over 1% and crude oil fell through $83 per barrel.

New data showed worse-than-expected US jobless claims for last week, plus faster-than-expected factory-gate inflation in March.


The Euro dropped towards March's 10-month lows as Greek government debt fell sharply once more.

"The Euro remains on the back-foot, as Greece's problems continue to intensify," notes Walter de Wet at Standard Bank.

"While gold is holding steady on ever-increasing sovereign risk, the stronger Dollar is capping upside. We expect this to remain the case.

"In recent weeks, we have seen decent physical demand whenever gold drops below $1130."

Paris paper Le Figaro said yesterday that France "is ready" to lend Athens almost €4 billion for 3 years at 5% per annum – the first chunk of a possible €45bn agreed by the Eurozone and IMF this month.

The cost of insuring Greek debt against default today rose to a new record high above 5.0% per year.

The gold price in Euros dipped through €27,500 per kilo as the Dollar rose.

British investors wanting to buy gold saw the price fall back to last week's close at £740 an ounce – the fourth highest-ever Friday finish – as the UK government reported its worst-ever peacetime borrowing figures.

"Given the speed of the rise [in platinum-group metals] over the last month, and the flow of scrap metal now coming back to market, any sort of failure at this level could lead to a significant correction," say metals-conglomerate Mitsui in a note, pointing to the near-26 month highs in platinum and palladium prices.

"But the longer-term fundamentals still look extremely bullish."

Global demand for platinum fell by 14% last year, the GFMS precious-metals consultancy reported today, led by a sharp fall in auto-catalyst production that came despite tax-funded "cash for clunkers" scheme across Western Europe and North America.

Platinum prices still rose 57% regardless, however, even as the global market moved into a record "surplus" of nearly 1.1 million ounces on GFMS's data.

"Jewelry was the savior last year," senior GFMS consultant Peter Ryan told Bloomberg by phone today.

"The worry now is we're already seeing signs of weaker jewelry demand in 2010 and we're also seeing signs of increased jewelry scrap flows."

Scrap gold grew by 27% to a record 1549 tonnes last year from 2009, GFMS said earlier this month.

Recycled metal accounted for a record 40% of all gold supplied worldwide, according to the consultancy's data.

Former world No.5 gold consumer, Turkey exported nearly 120 tonnes of gold jewelry in 2009 according to Erkan Kurtulmuş, president of the İstanbul Chamber of Commerce Jewelry Committee and owner of İnci Jewelry, speaking this week to English-language newspaper Today's Zaman in Istanbul.

"Some 40 tonnes came from gold that was kept under the mattress, back into the market again due to high gold prices. Another 40 tonnes was previously imported gold, while the remaining 40 tonnes came from scrap gold which was melted down and reshaped."

Yesterday First Cash Financial, the US and Mexico pawnbroking chain, reported a 26% increase in scrap-jewelry sales during the first quarter of 2010, primarily due to rising gold prices but also thanks to a 3% increase in scrap volumes purchased.

"People have only so much [gold jewelry] they can liquidate," notes one scrap-buying jeweler in the US, "and everybody and their sister have been setting up shop to buy.

"About 8 weeks ago, [scrap gold] supply dropped by 60-70% to what I would call typical levels," he tells The Daily Reckoning, confirming that jewelers, wholesalers and refiners nationwide report the same drop.

Over in the Philippines, meantime, the Social Security System said Wednesday it wants to introduce gold trading on the Manila stock exchange, adding that it's already approached the central bank to buy PHP 1 billion ($22.5m) of bullion.

The Bangko Sentral ng Pilipinas currently holds 154 tonnes of gold, according to data compiled by the World Gold Council, the 20th largest sovereign hoard.

That's down by 44% from a record peak of 274 tonnes in early 2003.

"The plan would enable SSS to hedge part of its assets in gold reserves, which is widely considered a safe and stable investment," the Social Security System said in a statement.

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