Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold Stocks Still Correcting - 27th Oct 20
Gold and Crypto: Is This How Charts Look Before A Monetary Collapse? - 27th Oct 20
Silver's Coming Double Trigger Shotgun Price Explosion - 27th Oct 20
The $126 Billion Gold Opportunity in Australia - 27th Oct 20
Tips to Breeze through Your Spanish Classes Online - 27th Oct 20
Try The “Compounding Capital Gains” Strategy Today - 26th Oct 20
UK Coronavirus Broken Test and Trace System, 5 Days for Covid-19 Results! - 26th Oct 20
How the Coronavirus is Exacerbating Global Inequality, Hunger - 26th Oct 20
The Top Gold Stock for 2021 - 26th Oct 20
Corporate Earnings Season: Here's What Stock Investors Need to Know - 25th Oct 20
�� Halloween 2020 TESCO Supermarkes Shoppers Covid Panic Buying! �� - 25th Oct 20
Three Unstoppable Forces Set to Drive Silver Prices - 25th Oct 20
Car Insurance And Insurance Claims and Options - 25th Oct 20
Best Pressure Washer Review - Karcher K7 Full Control Unboxing - 25th Oct 20
Further Gold Price Pressure as the USDX Is About to Rally - 23rd Oct 20
Nasdaq Retests 11,735 Support - 23rd Oct 20
America’s Political and Financial Institutions Are Broken - 23rd Oct 20
Sayonara U.S.A. - 23rd Oct 20
Economic Contractions Overshadow ASEAN-6 Recovery - 23rd Oct 20
Doji Clusters Show Clear Support Ranges for Stock Market S&P500 Index - 23rd Oct 20
Silver Market - 22nd Oct 20
Goldman Sachs Likes Silver; Trump Wants Even More Stimulus - 22nd Oct 20
Hacking Wall Street to Close the Wealth Gap - 22nd Oct 20
Natural Gas/UNG Stepping GAP Patterns Suggest Pending Upside Breakout - 22nd Oct 20 -
NVIDIA CANCELS RTX 3070 16b RTX 3080 20gb GPU's Due to GDDR6X Memory Supply Issues - 22nd Oct 20
Zafira B Leaking Water Under Car - 22nd Oct 20
The Copper/Gold Ratio Would Change the Macro - 21st Oct 20
Are We Entering Stagflation That Will Boost Gold Price - 21st Oct 20
Crude Oil Price Stalls In Resistance Zone - 21st Oct 20
High-Profile Billionaire Gives Urgent Message to Stock Investors - 21st Oct 20
What's it Like to be a Budgie - Unique in a Cage 4K VR 360 - 21st Oct 20
Auto Trading: A Beginner Guide to Automation in Forex - 21st Oct 20
Gold Price Trend Forecast into 2021, Is Intel Dying?, Can Trump Win 2020? - 20th Oct 20
Gold Asks Where Is The Inflation - 20th Oct 20
Last Chance for this FREE Online Trading Course Worth $129 value - 20th Oct 20
More Short-term Stock Market Weakness Ahead - 20th Oct 20
Dell S3220DGF 32 Inch Curved Gaming Monitor Unboxing and Stand Assembly and Range of Movement - 20th Oct 20
Best Retail POS Software In Australia - 20th Oct 20
From Recession to an Ever-Deeper One - 19th Oct 20
Wales Closes Border With England, Stranded Motorists on Severn Bridge? Covid-19 Police Road Blocks - 19th Oct 20
Commodity Bull Market Cycle Starts with Euro and Dollar Trend Changes - 19th Oct 20
Stock Market Melt-Up Triggered a Short Squeeze In The NASDAQ and a Utilities Breakout - 19th Oct 20
Silver is Like Gold on Steroids - 19th Oct 20
Countdown to Election Mediocrity: Why Gold and Silver Can Protect Your Wealth - 19th Oct 20
“Hypergrowth” Is Spilling Into the Stock Market Like Never Before - 19th Oct 20
Is Oculus Quest 2 Good Upgrade for Samsung Gear VR Users? - 19th Oct 20
Low US Dollar Risky for Gold - 17th Oct 20
US 2020 Election: Are American's ready for Trump 2nd Term Twilight Zone Presidency? - 17th Oct 20
Custom Ryzen 5950x, 5900x, 5800x , RTX 3080, 3070 64gb DDR4 Gaming PC System Build Specs - 17th Oct 20
Gold Jumps above $1,900 Again - 16th Oct 20
US Economic Recovery Is in Need of Some Rescue - 16th Oct 20
Why You Should Focus on Growth Stocks Today - 16th Oct 20
Why Now is BEST Time to Upgrade Your PC System for Years - Ryzen 5000 CPUs, Nvidia RTX 3000 GPU's - 16th Oct 20
Beware of Trump’s October (November?) Election Surprise - 15th Oct 20
Stock Market SPY Retesting Critical Resistance From Fibonacci Price Amplitude Arc - 15th Oct 20
Fed Chairman Begs Congress to Stimulate Beleaguered US Economy - 15th Oct 20
Is Gold Market Going Back Into the 1970s? - 15th Oct 20
Things you Should know before Trade Cryptos - 15th Oct 20
Gold and Silver Price Ready For Another Rally Attempt - 14th Oct 20
Do Low Interest Rates Mean Higher Stocks? Not so Fast… - 14th Oct 20
US Debt Is Going Up but Leaving GDP Behind - 14th Oct 20
Dell S3220DGF 31.5 Inch VA Gaming Monitor Amazon Prime Day Bargain Price! But WIll it Get Delivered? - 14th Oct 20
Karcher K7 Pressure Washer Amazon Prime Day Bargain 51% Discount! - 14th Oct 20
Top Strategies Day Traders Adopt - 14th Oct 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Gold Touches $992 New High As the US Dollar Sinks

Commodities / Gold & Silver Mar 06, 2008 - 12:34 PM GMT

By: Adrian_Ash

Commodities THE PRICE OF PHYSICAL gold bullion moved in a tight 0.8% range early Thursday, re-touching yesterday's new all-time high above $992 per ounce as the US Dollar sank once again.

As the opening drew near in New York – where a small bomb damaged an army recruitment center in Times Square overnight – crude oil jumped to a new record above $105 per barrel.

European stock markets meantime ticked 0.3% lower as the Euro single currency leapt to a new all-time high of $1.5345 after the central bank in Frankfurt kept its interest rates on hold at 4.0%.

"We could see Gold Prices spike this year and hit $1,500 per ounce," reckons Jay Taylor, editor of the Gold & Technology Stocks newsletter.

Peter Spina of , also speaking to Reuters, agrees that $1,500 or even $2,000 gold is "definitely possible" in the next year, while Peter Schiff of Euro Pacific Capital says "gold has a shot at $1,200 or even $1,500 this year.

"It is a measure of the value of currencies and will go up as long as central banks continue to devalue currencies."

Facing the fastest rate of Euro devaluation since the currency was launched in 1999, the European Central Bank today held its interest rates at 4.0% even after German factory orders showed a surprise 1.5% drop for January.

The Euro now pays fully 100 basis points more than the current US Fed funds rate, widely expected to fall another 75 points to 2.25% when the US central bank next meets on March 18th – and "there are pretty clear expectations for a further widening in interest rate differentials with the United States," says Tomoko Fujii, head of strategy at Bank of America in Tokyo, "keeping the Dollar at a disadvantage."

But within the 15-nation Euro currency zone, government bond yields point to growing pressures internal to the monetary union. "Club Med bonds have been hit hard," says Mark Ostwald of Insinger de Beaufort, referring to Italian, Greek and Spanish government debt.

"People have realized that countries like Italy and Spain have not carried out the reforms needed to control wages and boost productivity, and are now getting into trouble," he told The Telegraph in London overnight.

Today's Il Sole newspaper in Rome reports that the Italian Treasury has now stepped into buy up its own government bonds to support their price, because the "spread" between Italian bond yields and the return offered by German bunds – the benchmark for Euro debt – has reached a post-union record of 0.55%.

"A similar pattern has emerged across the southern belt of the Eurozone," says The Telegraph, "with spreads hitting post-EMU highs of 53 basis points versus Greece , 44 for Portugal , 38 for Belgium and 36 for Spain ."

The British Pound meantime jumped today to a new high for 2008 above $2.00 after the Bank of England voted to keep its interest rates on hold at 5.25%. That move kept the yield-gap with US Dollars at 225 basis points, and it knocked the Gold Price in Sterling 0.7% off Wednesday's near record high.

Despite the UK's relatively high interest rates, however, the British Pound has now lost two-thirds of its value against Gold Bullion since the current prime minister, Gordon Brown, famously sold off half the UK's official gold reserves back in June 1999 – the very bottom of the metal's two-decade bear market.

On Monday this week the Pound hit a new all-time low against gold, worth just 1/498th of an ounce.

Inflation of the UK money supply, meanwhile, was last pegged at 12.9% in the year to January. The world supply of gold bullion, in contrast, grew by less than 1.6% during 2007 according to data from the GFMS consultancy in London .

New Gold Mining Output added just 2,447 tonnes to the existing above-ground stock – a drop of 3% from 2006 and lower than all-but-one year of this decade's bull market so far.

"Shortages are developing because production is declining," says Jim Rogers, legendary commodities investor and author of the best-selling Adventure Capitalist , in a new interview with Reuters.

"People have been telling me for five years that oil prices are going down. Every time I ask them where the supply is coming from [but] so far, nobody has been able to tell me.

"Oil fields are in decline, copper mines are in decline. Whether it's oil, wheat or sugar, the world does not have new production capacity."

Platinum prices fell sharply early Thursday on news of a new energy agreement in South Africa – the No.1 producer of the industrial metal – where miners are now expecting 95% of normal power supplies, up from the 90% imposed since late January.

Over in India – where private Gold Buying accounted for one ounce in every five sold worldwide last year – current demand remains "very, very slack" due to the record high price says Prithviraj Kothari of Riddisiddhi Bullions in Mumbai.

"But there are many people who are short at around $980 an ounce levels," he said this morning. "They have to cover up soon."

And with the spring wedding season fast approaching, "there are people waiting in the sidelines to buy," says Sanjiv Agarwal at Reva Corp Ltd. "They want to see some stability."

Buying activity gathered momentum today, reports Livemint – the Wall Street Journal 's New Delhi service. "The Gold Market doesn't seem to be giving up its momentum," one analyst at IL&FS Investsmart Commodities told the newswire.

"There is no negative news [for gold] so far to help in profit taking."

The local Gold Price in New Delhi today hit a new record high above 13,050 Rupees per 10 grams.

By Adrian Ash

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
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 , giving you direct access to investment gold, vaulted in Zurich , on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2008

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.

Adrian Ash Archive

© 2005-2019 - 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