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 and Silver Bull Markets Can Withstand Liquidation

Commodities / Gold and Silver 2010 Dec 06, 2010 - 07:53 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD touched a near-record $1419 per ounce in Asian trade early on Monday, easing back as the Euro slipped vs. the Dollar and world stock markets stalled after last week's sharp gains.                   

Government bond prices rose, nudging yields lower. Crude oil slipped from new two-year highs above $89 per barrel. 


"The metals ran out of steam fairly quickly as profit-takers from the Far East emerged in number," says one dealer in a note.

But "Latest data confirms [that] gold is best positioned to withstand any substantial long liquidation," says commodity analyst Walter de Wet at Standard Bank, noting that - as a proportion of all gold futures contracts now open on the US Comex exchange - the net balance of speculative bets is below its two-year average at 30.4%, with silver's net speculative position at just 20% of open interest.

"Looking at historical levels," says de Wet, "gold above 35% and silver closer to 28% [would] look crowded."

Priced in the Euro, gold investment bars today came within 0.5% of last Wednesday's new record high at €34,400 per kilo.

Gold priced in British Pounds broke fresh all-time highs on Monday morning above £900 per ounce.

The silver price in Dollars meantime came within 4¢ of $30 an ounce, the highest level since Texan oil barons the Hunt Brothers were forced to unwind their attempted "corner" in the silver market three decades ago.

Priced in Pounds Sterling today, the price of silver bullion briefly rose above £19 per ounce – the highest level since its all-time peak of mid-Jan. 1980.

"This fear of inflation I think is way overstated...We're not printing money. The money supply is not changing in any significant way," said US Federal Reserve chairman Ben Bernanke to Sunday's 60 Minutes show on CBS.

"Disinflation is underway, with deflation a real eventual possibility," writes Bernanke's former colleague at Princeton University, Nobel-winner Paul Krugman, in his New York Times' blog, illustrating his point with charts of US wages and consumer prices excluding housing, food and energy costs.

"The good news is that the European Central Bank will probably start a massive additional round of quantitative easing to fight the break-up of the Eurozone," says Reuters columnist James Saft, writing about the Irish and broader Eurozone debt crisis.

"The bad news is that they will, as ever, only choose the right policy...after exhausting all of the alternatives."

Senior Eurozone policy-makers Jean-Claude Juncker and Giulio Tremonti today called for the launch of joint debt agency, urging the creation of "E-bonds" to finance sovereign spending by all 16-member states, so as to prove the "irreversibility of the Euro.

"The European Council could move as early as this month to create such an agency," write the pair - also Luxembourg premier and Italian finance minister respectively - "with a mandate gradually to reach an amount of outstanding paper equivalent to 40% of the gross domestic product of the European Union and of each member state."

But "Without fundamental changes in the European framework, it's not possible," replies German finance minister Wolfgang schäuble, also speaking to the FT.

Ahead of Tuesday's proposed budget from the Dublin government - expected to be rejected by both the opposition and Fianni Fail's coalition partners - Irish debt prices rose in early European trade today, after clearing-house LCH Clearnet cut from 45% to 30% the deposit required from traders holding the bonds.

Prices slipped back, however, to nudge 10-year Irish yields back up to 8.20% by lunchtime.

"As long as [Europe is] being seen as reactive, we're going to have a slow-motion wreck going on," says bond-manager Pimco's chief executive, Mohamed El-Erian.

Ireland is "likely" to leave the Euro, he told CNBC, "unless we see more than just liquidity support, unless we see something that deals with the balance sheets."

"While lingering concerns over Eurozone debt issues maintains safe-haven buying, the potential for a longer-than-expected period of expansionary monetary policy in the US and Europe is prolonging the precious metals bull market," says a new report on gold and silver investment from Morgan Stanley analysts, quoted today by Dow Jones Newswire.

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.


© 2005-2022 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