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
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20
Does the Stock Market Really "See" the Future? - 12th Sept 20
Basel III and Gold, Silver and Platinum - 12th Sept 20
Tech Stocks FANG Index Nearing Critical Support – Could Breakout At Any Moment - 12th Sept 20
The Tech Stocks Quantum AI EXPLOSION is Coming! - 12th Sept 20
AMD Zen 3 Ryzen 4000 Questions Answered on Cores, Prices, Benchmarks and Threadripper Launch - 12th Sept 20
The Inflation Mega-trend is Going Hyper! - 11th Sep 20
Gold / Silver Ratio: Slowly I Toined… - 11th Sep 20
Stock Market Correction or Reversal? The Jury Isn't Out! - 11th Sep 20
Crude Oil – The Bearish Outlook Remains - 11th Sep 20
Crude Oil Breaks Lower – Sparking Fears Of Another Sub $30 Price Collapse - 11th Sep 20
Inflation by Fiat - 10th Sep 20
Unemployment Rate Drops. Will It Drag Gold Down? - 10th Sep 20
How Does The Global Economy Recover After This Global Pandemic? - 10th Sep 20
The Best Mobile Casino - 10th Sep 20

Market Oracle FREE Newsletter

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

Gold Dips as Crude Oil Gains

Commodities / Gold & Silver May 27, 2008 - 07:52 AM GMT

By: Adrian_Ash

Commodities SPOT GOLD PRICES ticked lower in early action on Tuesday, slipping just below the tight trading range seen on Monday, when London and New York – the center of world Gold Trading – were closed for public holidays.

Crude oil meantime rose above $133 per barrel after militants hit key pipelines in Nigeria .


Asian stock markets closed higher while government bond prices held flat. European equities fell for the fourth session in six.

"With crude oil showing no signs of stalling, and the US Dollar relatively weak, the upside potential for Gold prevails," says Manqoba Madinane for Standard Bank in Johannesburg , South Africa today.

"However, it has been a nice recovery since the dip into the mid-800s, and perhaps the Gold Market needs a break before making the next move higher."

Speculative gold traders built their largest "bullish" position in two months in the week-ending May 20th according to data from the US gold futures market.

Taking the other side of those "long" contracts, the commercial traders of refinery and Gold Dealing groups grew their bearish position by more than one fifth.

By the AM Fix in London today, the Gold Price had fallen to $923.75 per ounce, almost $4 below the previous fix set on Friday afternoon but 1.6% higher from Tuesday last week.

Rice futures meantime tumbled in Asian trade for the second-day running after Cambodia lifted export restrictions.
 
Confirming that there are no local shortages – despite the fastest growth in world food prices since the end of the Second World War – Cambodia is the first rice-growing nation to reverse the trend begun last October by India and since followed by Egypt , Vietnam , Brazil and Bangladesh .

In Manila today, only one trading company joined the Philippines government in bidding for new food imports, proving that "the country was not suffering from rice crisis" according to Enquirer.net.

Pointing to the gap between inflation and interest rates, however, "emerging economies risk repeating the same mistakes that the developed world made in the inflationary 1970s," notes the latest edition of The Economist .

"Monetary policy has in effect been loosened: real interest rates are generally lower than they were a year ago."

As a result, "five of the ten biggest emerging economies could have inflation rates of 10% or more by mid-summer.

"Two-thirds of the world's population may then be struggling with double-digit inflation."

( What's the real link between Gold & Inflation ? For a detailed PDF report, read Five Myths of the Gold Market ... )

On the currency markets today the European single currency slipped almost one cent from a new five-week high – hit overnight above $1.5810 – on a weaker than expected GfK consumer confidence report from Germany.

But that move failed to stop the Gold Price in Euros dipping to a five-session low beneath €586 per ounce. For British investors wanting to Buy Gold today, the price slipped just below last week's close at £467.40.

"Alan Greenspan, former Fed chairman, said that the US economy has not averted the risk of a recession," notes today's Gold Market report from Mitsui, the precious metals dealer, citing a report in the Financial Times.

"However, interest rate futures are currently pricing a 90% probability of the Fed keeping rates unchanged – which could see the US Dollar rebound today."

Last week saw the major Western stock markets give back one-third of the 15% gains made since mid-March, when the Federal Reserve aided the "fire-sale" rescue of Bear Stearns by J.P.Morgan.

Now "further equity market weakness could further boost commodity investment sentiment," Mitsui says.

"Look out for May US consumer confidence and April New Home sales statistics, due to be released today, for further indications of the state of the US economy."

Wednesday brings the latest inflation data from Germany , the world's third largest economy. Official GDP growth for the first quarter is then due out in the United States on Thursday.

The Dept. of Transportation said Monday that US consumers slashed the miles they drove in March, recording "the sharpest yearly drop for any month" since records began in 1942.

The American Automobile Association (AAA) says that for the first time since 2002, private individuals planned to cut their driving over the Memorial Day weekend finishing yesterday.

But "any demand decrease out of the US is immediately eclipsed by anything out of the Asian region right now," believes Jonathan Kornafel at Hudson Capital Energy in Singapore, speaking to Bloomberg – "and that has everything to do with subsidies."

Saturday saw the government of Indonesia finally slash its crude oil subsidies, forced by surging oil market prices to push the price at the pumps more than 28% higher.

Sri Lanka then cut its fuel subsidies on Sunday. Bangladesh and India are said to be considering a similar move.

China continues to undermine the impact of rising oil prices on demand, however, by subsidizing petrol to just 60% of US gas prices.

British drivers pay almost four times as much per gallon of gas as Chinese consumers and businesses.

By Adrian Ash
BullionVault.com

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 www.BullionVault.com , 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 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