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 Crashes Through Support on Hedge Fund Selling

Commodities / Gold & Silver Sep 11, 2008 - 08:18 AM GMT

By: Mark_OByrne

Commodities THE PRICE OF GOLD fell yet again early in London on Thursday, slumping from an overnight floor of $756 to reach a new 11-month low at $739 per ounce.

World stock markets fell for the seventh Sept. session in nine as investors fled all asset classes for cash, dragging Russian equities to a new two-year low and pulling Taiwanese stocks to their worst average since late 2005.


Crude oil slipped, soft commodities sank, and the risk of a major financial default – as measured by the CDX index of credit-default swaps – rose once again.

The Euro fell through $1.39 on forecasts of lower Eurozone growth, capping the fall in Gold vs. the Euro at a four-week low of €535.

Only US Treasury bonds managed to climb against the all-conquering Dollar, however, pushing the yield paid by 10-year notes down to a five-month low of 3.61%.

"With the Dollar steaming ahead, and ignoring technical momentum signals, US bonds continue to attract safe-haven investment flows," writes Manqoba Madinane at Standard Bank in Johannesburg, "creating a positive feedback loop for the greenback.

"Further appreciation for the Dollar should precipitate more fund liquidation in precious metals."

"The sellers do not look like they are running out of steam yet," agrees today's note from Mitsui in London. " Gold broke a three-year trend-line yesterday as it fell below $760, and with additional technical selling coming to the market we are under pressure once again."

Wednesday saw the SPDR exchange-traded gold fund in New York cut its holdings by 2.5%, taking the shrinkage in these Gold ETF shares to 91 tonnes since mid-July.

"It's time to look at other [price] objectives on this liquidation," says the latest technical analysis from Stephen Malyon at Scotia Mocatta, the London-based bullion bank.

"The 76.4% retracement of our one-year range is seen at $735. A full 100% reversal would have gold down at $643."

Looking at the on-going collapse in Gold Mining stocks, Barry Sargeant at MineWeb notes "the 25% contraction in the Dollar gold bullion price...but an average weighted loss in value of 57% in the case of 179 listed gold stocks.

"This indicates that investors in listed gold stocks are discounting further falls in the Dollar Gold Price ."

Back on the currency markets today, the British Pound tumbled through $1.75 – undoing in eight weeks what it took ten months to achieve back in 2006 – after US academic David Blanchflower, the most dovish member of the Bank of England's policy team, told UK politicians to expect month-on-month job losses of 60,000 even as inflation in the cost of living rises to 5%.

The New Zealand Dollar sank to its weakest level in two years – down 19% from March – following a larger-than-expected 0.5% cut to Kiwi interest rates.

Consumer food prices in New Zealand jumped 2.6% month-on-month in August, the official data agency said today, sharply higher from July's 0.6% increase.

Crude oil slipped back to $102 per barrel despite Hurricane Ike gaining strength as it heads for the coast of Texas and the major US oil installations in the Gulf of Mexico.

Meantime in the United States – where the ABC consumer confidence index for last week fell below analysts' already miserable expectations – Dow Jones futures pointed almost 1% lower ahead of Wall Street opening for business.

Shares in Washington Mutual yesterday fell 29% to close at a 17-year low as the price of its debt sank so fast, its yield-spread grew wider than Lehman Brothers' – which in turn is now wider than Bear Stearns' spreads just before its collapse in mid-March.

"We'd expect the Dollar to sell off far more on this type of negative news," says Michael Woolfolk, chief currency strategist at Bank of New York Mellon.

"What this means is the turmoil we're currently seeing in US financials is pushing investors to the sidelines and [forcing] many international investors to the Dollar." ( But should investors trust the Almighty Dollar & Its Keepers to defend its value? Read on here... )

"The market's still shaking out who's going to be able to survive if the economy continues slowing down and home values continue to decline," agrees Mirko Mikelic, head portfolio manager at the $34 billion Fifth Third Asset Management group in Michigan.

"Capital is precious, and if you have it, you want to hold onto it because more write-downs are coming down the pike."

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