Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Continues to Retreat From New All Time High

Commodities / Gold and Silver 2010 May 18, 2010 - 07:59 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF WHOLESALE gold bullion bars fell further in London dealing on Tuesday, extending the discount to 3.2% from Friday's record high against the Dollar as world stock markets and commodity prices bounced sharply.

The US Dollar eased back, losing 1% from yesterday's four-year high to the Euro.


Government bonds were little changed.

The Greek government today received the first €20 billion ($25bn) of its €110bn European rescue package.

Athens has an €8.1bn bond repayment due on Wednesday.

"Gold still looks vulnerable to more sell-offs, as stocks and the Euro look capable of rebounding," says one Asian trader in a note.

"Support at low $1210s will be given stern test."

"Gold seems to be losing momentum," agrees Walter de Wet at Standard Bank, adding that the metal "failed to rally yesterday, even though risk metrics such as the VIX jumped higher and other commodities pushed lower."

The first two weeks of May saw US crude oil contracts drop almost 19%. The gold price added 5.8%.

"We believe that gold's downside is better protected than most metals," de Wet continues, "but still we'd look for a further correction lower before we'd see value in adding new longs."

WTI crude oil contracts today jumped back above $70 per barrel. The gold price in Dollars slipped to $1208 an ounce.

Silver prices unwound almost all of last week's 8.0% jump, dipping below $18.70 an ounce.

"It is evident that the search for safe havens is driving investors to gold," writes Wolfgang Wrzesniok-Rossbach at German refining group Heraeus in Hanau.

"New highs in ETF [holdings], and a strong demand for physical gold in the form of investment bars point to such a development...especially for Germany [where] buyers of investment bars are again having to accept waiting periods for delivery."

Heraeus says it has increased gold bar production to keep "waiting periods manageable".

"Incidentally, enough feed continues to be available as supplies of scrap gold in Europe, as well as Asia, are at robust levels thanks to the high price," says Wrzesniok-Rossbach.

On the political front, meantime, "It is now very important to reinforce confidence in the Euro economy," said EU economy commissioner Olli Rehn at a meeting of European finance ministers today in Brussels, designed to set strict "austerity budget" targets for the 27-member union.

But after the European Central Bank announced buying its first €16.5bn of Greek debt on Monday, "The ECB is now purchasing the government debt of sovereigns whose solvency is in question," notes economist David Mackie at J.P.Morgan in London.

"Neither the Bank of England nor the Federal Reserve did that" with their Quantitative Easing programs.

Here in the UK, new data showed consumer price inflation rising sharply last month and hitting a 19-year high on the Retail Price Index (excl. mortgage interest).

"The Bank of England still looks unlikely to raise interest rates anytime soon," says Howard Archer of IHS Global Insight, because the government debt burden – and the stuttering private-sector recovery – look to require continued cheap money.

The gold price in Sterling dropped 4.1% from Monday's all-time intraday peak, dipping through £835 an ounce – a level first broken on Wednesday last week.

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.


© 2005-2022 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