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

Institutions Dump Stocks for Gold as Confidence in Financial Markets Evaporates

Commodities / Gold & Silver Sep 29, 2008 - 09:59 AM GMT

By: Adrian_Ash

Commodities SPOT GOLD BULLION PRICES recovered an early 1% dip vs. the Dollar and leapt against other key currencies on Monday, as a wave of bank failures and emergency rescues across Europe drove Treasury bond prices higher, forcing the yield offered to new buyers still further below the rate of inflation.

World stock markets sank, cutting 3% off European blue-chips and driving Tokyo's Nikkei index towards fresh three-year lows, while the price of crude oil slid more than $4 per barrel to $102.70 amid the panic.


"Despite the [$700bn] US Bail-Out Plan now being committed to paper," said one London analyst to Reuters, "there's hardly a jubilant mood.

"The fact the funds won't be released in one lot but instead in a series of tranches is certainly detracting from its appeal."

Here in the United Kingdom, the government seizure of Bradford & Bingley – a major player in "buy-to-let" investment mortgages – sent London's banking sector plunging as the Chancellor, Alistair Darling, told the BBC that its competitors will now have to fund the shortfall in state-guaranteed insurance of deposit accounts.

The second nationalization of a UK bank in 12 months emptied the government's Financial Compensation Scheme of £12 billion ($21.5bn) – and required an extra £4bn from the Treasury – to smooth the sale of B&B's deposit business to Santander of Spain.

On the currency markets today, the British Pound tumbled to its worst intra-day losses since 1993, down almost 5¢ vs. the Dollar to a one-week low of $1.7960.

The Gold Price in Sterling leapt to a fresh six-month high, up 3.6% in morning trade to stand just 4% off its all-time high of £512 an ounce, reached in mid-March this year.

For French, German and Italian investors, the price of Gold gained 2.9% from Friday's close – touching €619 an ounce as the single currency dropped 1.3% vs. the Dollar – after the near-failure of Belgian-based Eurozone giant, Fortis.

The governments of Belgium, Netherlands and Luxembourg pumped €11.2 billion into the banking and insurance group, taking a 49% stake in return.

Germany's second-largest commercial real estate lender, Hypo Real Estate, secured a fresh line of €35 billion in government and emergency bank credit. Its stock sank 61% on the news.

The Icelandic Krona dumped almost 7% against the US Dollar after the Reykjavik government bought a 75% stake of Glitnir, the country's third-largest bank.

America's sixth-largest bank, Wachovia, was said by the New York Times to be seeking a sale to Citigroup or Wells Fargo.

"Institutional investors and private banks in particular will all be reconsidering their strategy. My belief is they are likely to want to own some gold again," said Jeremy Charles, head of precious metals trading at HSBC and chairman of London Bullion Market Association , to Reuters earlier.

Speaking at the LBMA's annual conference – this year held in Kyoto, Japan – Charles told the newswire that he sees only a 10% potential drop in Gold Prices right now, with " far greater potential on the upside.

Pointing to the Gold Coin Shortage that's hit retail gold investors worldwide since July, "the [soaring] premiums around the world tell a big story to me," he went on.

"The recent dip in the Gold Price has created massive demand from the retail investors."

Meantime in the paper promises of Gold Futures and options, speculative gold traders are being forced to close their positions due to the dearth of credit and surging financing costs.

Open interest in Comex gold contracts shrank by 6.5% in the week to last Tuesday, according to US regulator the Commodities Futures Trading Comission (CFTC).

The latest data also shows that hedge funds and other "large speculators" – hit by soaring financing costs and margin requirements as financial credit dries up – grew their long positions by just 6% as the price leapt $110 per ounce between 15th and 22nd Sept.

Previously taking their most "bearish" stance overall so far this decade early this month, hedge-fund and institutional traders were forced to slash their short position by a massive 37% as the Gold Price jumped from $780 to $890 an ounce.

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