Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Social Mood and Leaders Impact on General Election Forecast 2019 - 9th Dec 19
Long-term Potential for Gold Remains Strong! - 9th Dec 19
Stock and Financial Markets Review - 9th Dec 19
Labour / Tory Manifesto's Impact on UK General Election Seats Forecast 2019 - 9th Dec 19
Tory Seats Forecast 2019 General Election Based on UK House Prices Momentum Analysis - 9th Dec 19
Top Tory Marginal Seats at Risk of Loss to Labour and Lib Dems - Election 2019 - 9th Dec 19
UK House Prices Momentum Tory Seats Forecast General Election 2019 - 8th Dec 19
Why Labour is Set to Lose Sheffield Seats at General Election 2019 - 8th Dec 19
Gold and Silver Opportunity Here Is As Good As It Gets - 8th Dec 19
High Yield Bond and Transports Signal Gold Buy Signal - 8th Dec 19
Gold & Silver Stocks Belie CoT Caution - 8th Dec 19
Will Labour Government Spending Bankrupt Britain? UK Debt and Deficits - 7th Dec 19
Lib Dem Fake Tory Election Leaflets - Sheffield Hallam General Election 2019 - 7th Dec 19
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19
What UK CPI, RPI and REAL INFLATION Predict for General Election Result 2019 - 5th Dec 19
Supply Crunch Coming as Silver Miners Scale Back - 5th Dec 19
Gold Will Not Surpass Its 1980 Peak - 5th Dec 19
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19
The Narrative About Gold is Changing Again - 2nd Dec 19
Stock Market Liquidity & Volume Diminish – What Next? - 2nd Dec 19
A Complete Guide To Finding The Best CFD Broker - 2nd Dec 19
See You On The Dark Side Of The Moon - 2nd Dec 19
Will Lib Dems Win Sheffield Hallam From Labour? General Election 2019 - 2nd Dec 19
Stock Market Where Are We?  - 1st Dec 19
Will Labour's Insane Manifesto Spending Plans Bankrupt Britain? - 1st Dec 19
Labour vs Tory Manifesto Debt Fuelled Voter Bribes Impact on UK General Election - 30th Nov 19
Growing Inequality Unrest Threatens Mining Industry - 30th Nov 19
Conspiracy Theories Are Killing This Nation - 30th Nov 19
How to Clip a Budgies / Parakeets Wings, Cut / Trim Bird's Flight Feathers - 30th Nov 19
Hidden Failure of SIFI Banks - 29th Nov 19
Use the “Ferrari Pattern” to Predictably Make 431% with IPOs - 29th Nov 19
Tax-Loss Selling Drives Down Gold and Silver Junior Stock Prices - 29th Nov 19
We Are on the Brink of the Second Great Depression - 29th Nov 19
How to Spot REAL Amazon Black Friday Bargains and Avoid FAKE Sales - 29th Nov 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

Gold Hits New Record High as IMF Economist Calls Inflation a Very Good Thing

Commodities / Gold and Silver 2010 Nov 05, 2010 - 10:14 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF WHOLESALE gold bullion ticked back from a new US Dollar record in morning trade in London on Friday, setting a new all-time-high London Fix of $1384.20 per ounce after what one trader called Thursday's "phenomenal" gains.

European and US stock markets stalled after new data showed a surprise rise in US payrolls, but no change in the 9.6% jobless rate.


The Euro and Sterling both fell back from fresh 2010 highs vs. the Dollar, but oil rose and London copper prices came within 2.5% of 2008's pre-Lehmans' collapse peak.

Priced in British Pounds Sterling, Diapason Commodities index of commodities rose above its 2007 record, says the FT's Alpha blog.

Silver bullion this morning jumped above $26 per ounce – its 14th new 30-year high of the last 33 trading days.

"The bear trend is now so strong in the Gold/Silver Ratio that we would not rule out the 2008 low of 47.52 as a possible target," says Russell Browne at Scotia Mocatta.

The ratio of gold to silver prices today slipped beneath 53, a two-year low broken in only three short periods since the mid-1980s.

Meantime in India, "So far, gold sales have been super-duper throughout the year," says Darshan Zaveri, director of Manubhai Zaveri Ornaments in Ahmedabad, to India's Economic Times. But this week – starting with the Hindu festival of Dhanteras and culminating in the gold-buying festival of Diwali this weekend – "sales have doubled from 2-3 years ago, as rising prices have reinforced trust" in precious metals.

"We've definitely not seen a rush like that in the last two or three years," agreed a secure logistics executive to BullionVault by phone on Thursday, commenting on the three weeks to Monday.

Earlier still, cargo shipments of gold were "booming" to India – the world's No.1 consumer market – he said, even amid mid-Sept.'s typically quiet remembrance of the dead observance, Pitar Pak.

"It's interesting," says Dick Poon, Hong Kong manager for the German-based Heraeus refinery group. "There's not much scrap sold back into the market...[so] everybody needs to import to fulfill customer orders."

Here in the developed West, meantime, "What we're seeing now is a general shift in people's attitude towards things that are going to preserve their purchasing power over time, and gold is a natural beneficiary of this kind of activity in the market," reckons Blackrock's £2.8 billion Gold & General fund manager Evy Hambro, speaking to Reuters.

"If the Dollar continues to weaken, and/or long-term interest rates remain low, this will be supportive for gold prices," concurs the latest Commodities Weekly from Natixis bank.

But "A bit of inflation clearly would be very good, what we want to avoid is deflation," reckons Olivier Blanchard, chief economist at the International Monetary Fund, speaking to CNBC on Thursday after the Federal Reserve announced $600bn of new money creation for its QEII program.

"A weaker Dollar fits in very well with Ben Bernanke's reflationary strategy," says Gluskin Sheff economist David Rosenberg, warning that the Dollar's descent may quickly become "destabilizing".

"Risk assets from equities, to credit, to emerging markets have, in recent months, become correlated with a weaker US Dollar in an unprecedented fashion," he notes.

Gold's daily correlation with changes in the Euro/Dollar exchange rate remained strongly positive on Thursday at 0.67, but the connection slipped again from last month's two-year high above 0.96.

That figure would read +1.0 if gold and the Euro moved perfectly in lock-step together against the Dollar.

Amid this May's Greek deficit crisis, gold's correlation with the Euro sank to a 17-year low, hitting a near-perfect negative correlation of 0.92 as bullion rose but the single currency sank.

"ECB buying could stabilize the situation" in Irish government bonds, today's Irish Independent quotes Gary Jenkins at Evolution Securities, after Dublin's debt fell in price for the eighth day running – pushing 10-year yields up to a record 7.7% – despite the government "front-loading" the next four years of budget cuts into 2011.

Ireland's yield-spread over benchmark German Bunds widened further on Friday. The price of credit-default insurance on Irish bonds also rose.

"This is Ireland's last chance to impress," reckons Alan McQuaid, chief economist at Dublin's Bloxham Stockbrokers. "Failure to do so will have serious negative consequences."

The gold price in Euros recovered all of this week's earlier losses late Thursday, rising this morning to €31,650 per kilo and nearing its third weekly gain in the last month.

By Adrian Ash

BullionVault.com

Gold price chart, no delay   |   Buy gold online at live prices

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