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

Euro-Gold Just 1% Off Record High, "Gold Is Money"

Commodities / Gold and Silver 2012 Sep 20, 2012 - 06:48 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleWHOLESALE PRICES to buy gold using US Dollars or British Pounds fell Thursday morning to trade just 1% below their 7-month highs of the last week.

Commodity prices dropped once again with Asian and European equities, while major-economy government bonds rose after new data showed Chinese factory output falling and Europe's private-economy contracting at the fastest pace in 3 years.


The Euro also slipped Thursday morning, extending this week's drop from 4-month highs.

That buoyed prices to buy gold in Euros back to €1360 per ounce (€43,725 per kilo) – barely 1% below Sept. 2011's all-time high.

"While the uptrend [in Dollar gold] is still intact, price action is lackluster and we have been moving sideways for the past 4 sessions," notes Russell Browne, strategist at Scotia Mocatta in his latest technical analysis.

Overnight in Asian trade, "There was another significant flushout" in crude oil prices, says Alex Thorndike, senior precious metals trader at MKS Capital in Sydney – now down to a 6-week low.

"Precious [metal trade] was heavy on the back of this move," says Thorndike, reporting "a significant wash out for the yellow metal in a fairly brutal sweep."

"Short-term," adds a technical analysis from London market-makers Societe Generale – and pointing to a continued "down trend" off Sept. 2011's all-time high – prices to buy gold in Dollars this morning "broke the steep channel support line which was in place since early September.

"A further correction will develop to 1756/53 then 1745 and 1736."

As the Dollar gold price steadied around $1760 per ounce late-morning in London, the price of silver bullion also bounced from a 2-session low vs. the US Dollar.

Priced in the Euro, silver today traded at €26.50 per ounce (€852 per kilo) – up 25% since mid-June.

"While [gold] is included in the commodities basket, it is in fact a medium of exchange and one that is officially recognised – if not publically used as such," write Deutsche Bank analysts Daniel Brebner and Xiao Fu in a new report this week.

"We see gold as an officially recognised form of money for one primary reason: it is widely held by most of the world's larger central banks as a component of reserves."

Going further, "Gold is the only currency," said CNBC TV host, self-declared entertainer and educator Jim Cramer to TheStreet.com – the financial site he co-founded in 1996 – on Wednesday.

"People say to me, 'What is the one currency you can trust?' I come back and say, 'Gold, because there is such a tremendous scarcity.'

"People regard it as a precious metal. I think that's the wrong call."

Back in the wholesale gold bullion market meantime,"The flow of business remains dull in the physical space," says one London dealer in a note, "with Indian demand completely off despite being the high season of purchases in front of Diwali."

Luxury goods including watches, pens and iPads "are set to replace gold and silver coins" and religious items as corporate gifts during this year's Hindu 'festival of lights' – falling in mid-November 2012 – reports the Economic Times today from Ahmedabad and Kolkata.

"The popularity of gold recycling," adds the Wall Street Journal – which cites industry officials and analysts – "is [also] likely to weigh on gold demand in India, the world's biggest consumer of physical gold."

So far in 2012 some 40% of Indian gold sales have in fact been exchanges of old items, reckons Prithviraj Kothari, president of national trade body the Bombay Bullion Association. That's up from 20% previously.

Opposition parties in India called for a national strike – closing many jewelers as well as other shops, schools and government buildings – in protest at the latest rise in official diesel fuel prices.

Central government workers and pensioners may get a rise to match that inflation in their Dearness Allowance, a cost-of-living bonus given to some 8 million people, according to local press.

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 2012

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