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
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
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

Market Oracle FREE Newsletter

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

Gold Follows Crude Oil Higher

Commodities / Gold & Silver Jun 09, 2008 - 08:33 AM GMT

By: Adrian_Ash

Commodities

SPOT GOLD PRICES rose sharply at the London opening on Monday, starting the week $20 per ounce above last Monday's start as crude oil dipped from its new all-time highs.

The US Dollar fell hard on the currency market. The Nikkei share index in Tokyo closed the day more than 2% lower.


"The Gold Market looks bullish on the Dollar and oil," reckons Narayan Gopalakrishnan, a trader at MKS Finance in Geneva , speaking to Bloomberg today.

"We could see $920, $925 this week."

Iran 's delegate to the Opec oil cartel yesterday repeated last week's forecast from Morgan Stanley that crude oil could reach $150 per barrel this summer.

Saudi Arabia 's oil minister, however, told reporters that Friday's new peak above $139 per barrel is "unjustified".

On the food markets this morning, corn prices leapt to a new record high as heavy rain continued to flood unplanted fields in the US mid-west.

Soybeans, wheat and rice also rose, as did base metals.

"After the European Central Bank hinted at a rate hike at its next meeting," notes Manqoba Madinane for Standard Bank today, "we believe the Dollar should remain under pressure in the near term.

As investors "plough funds back into commodities to hedge against erosion in the US currency, this could boost global inflation expectations, which should lend further support to precious metals."

Short- and medium-term government bond prices fell everywhere early Monday, pushing the two-year US Treasury yield nearly seven basis-points higher to 2.45%.

Longer-dated bond prices rose, however, widening the gap further between short-term and long-dated returns on European and UK government debt.

This "inverted yield curve" – where longer dated bonds pay less than short-term debt – is "often seen as a predictor of an economic downturn," notes Reuters today, "because it suggests that bond investors believe the central bank...will have to cut rates to revive a slowing economy."

Over on the forex market today, the Euro leapt to a near-7 week high above $1.5840 on news that Germany 's trade surplus swelled to €18.7 billion in April.

That capped the Gold Price in Euros just below a one-week high of €575 per ounce

The British Pound jumped one cent to a five-session high above $1.9790 after the United Kingdom reported a fresh record in producer input prices, now rising at 28% year-on-year.

US import price data will be released Thursday, along with the latest retail sales numbers. The latest US consumer price inflation data will be released this Friday.

The New York stock markets dropped 3.5% last week after the Labor Dept. said US unemployment rose sharply in May.

"The aggressive financial policies of the biggest economy in the world have led not only to corporate losses; most people on the planet have become poorer," said Russian president Dmitry Medvedev at the St Petersburg Economic Forum on Saturday.

At the same conference on Sunday, Jim O'Neill – chief economist at Goldman Sachs – said the financial crisis now hitting the United States will allow the world's fastest-growing economy to claim a bigger share of global wealth.

"On a relative basis it definitely allows the BRICs [meaning Brazil , Russia , India and China ] to develop faster as they are going to take an even bigger share of GDP sooner."

But emerging economies also face the same pressures of "easy money" forcing a bubble in financial assets and mis-investment.

"Policy makers were expecting slower global growth to bring down inflation and do their work for them," notes Robert Prior Wandesforde at HSBC in Singapore . "That's not going to happen.

"Monetary policy is incredibly loose, and they have a lot of catching up to do."

Just as in the United States , interest rates in Thailand are now less than half the rate of consumer-price inflation, currently running at 6.2% per year. In China , the People's Bank this weekend raised the proportion of cash deposits which private banks must keep back in reserve – hiking the requirement to 17.5%. But its target interest rate also remains below the rate of inflation.

China 's overnight target rate is 7.5%. Consumer prices are rising at a 12-year high of 8.5%.

"In a large slug of the Asian emerging world," as Alan Ruskin at RBS Greenwich Capital notes to Bloomberg, "monetary policy is just too easy."

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