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
UK Government Loses Control of the Coronavirus Pandemic 2nd Wave Forecast Consequences - 1st Oct 20
The Prospects of the Rocky S&P 500 Stock Market Recovery - 1st Oct 20
Global Stock Markets: Keep Your Eye on This Remarkable "Divergence" - 1st Oct 20
Covid-19 - The Only Thing Systematic Is The Destruction Of America - Part 2 - 1st Oct 20
Fed Isn’t Thinking about Rate Hikes. So Does It Maybe Think about Gold? - 1st Oct 20
Who is Spreading the Virus? UK Coronavirus 2nd Wave Analysis - 30th Sep 20
Gold And Silver Follow Up & Future Predictions For 2020 & 2021 – Part II - 30th Sep 20
The Only Thing Systematic Is The Destruction Of America - 29th Sep 20
Fractional-Reserve Banking Is The Elephant In The Room - 29th Sep 20
Gold And Silver Follow Up & Future Predictions For 2020 & 2021 – Part I - 29th Sep 20
Stock Market Short-term Reversal - 29th Sep 20
How Trump co-opted the religious right and stacked the courts with conservatives - 29th Sep 20
Which RTX 3080 GPU to BUY and AVOID! Nvidia, Asus, MSI , Palit, Gigabyte, Zotac, MLCC vs POSCAPS - 29th Sep 20
Gold, Silver & HUI Stocks Big Pictures - 28th Sep 20
It’s Time to Dump Argentina’s Peso - 28th Sep 20
Gold Stocks Seasonal Plunge - 28th Sep 20
Why Did Precious Metals Get Clobbered Last Week? - 28th Sep 20
Is The Stock Market Dow Transportation Index Setting up a Topping Pattern? - 28th Sep 20
Gold Price Setting Up Just Like Before COVID-19 Breakdown – Get Ready! - 27th Sep 20
UK Coronavirus 2nd Wave SuperMarkets Panic Buying 2.0 Toilet Paper , Hand Sanitisers, Wipes... - 27th Sep 20
Gold, Dollar and Rates: A Correlated Story - 27th Sep 20
WARNING RTX 3080 AIB FLAWED Card's, Cheap Capacitor Arrays Prone to Failing Under Load! - 27th Sep 20
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelerting Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
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 Rallies as Dollar and Yen Correct

Commodities / Gold & Silver Oct 28, 2008 - 12:48 PM GMT

By: Adrian_Ash

Commodities THE PRICE OF GOLD BULLION continued to rally on Tuesday, rising to a four-session high above $752 per ounce as world stock markets also bounced after falling 12 times in 19 days in October.


Government bonds fell fast as money moved back into equities, pushing the yield offered by 10-year US Treasuries ten basis-points higher to 3.79%.

Consumer-price inflation in the United States was last pegged at 4.9% annually.

US crude oil futures also turned higher early Tuesday, bouncing 2.4% from yesterday's 15-month low to $64.75 per barrel. Food stuffs and base metals jumped alongside, led by an 11% gain in nickel.

Both the Strong US Dollar and Japanese Yen meantime slipped back on the currency markets, dropping 1.5% and 3.5% respectively vs. the Euro.

"Today is Diwali , the Indian festival of lights," notes the London team at precious-metals dealer Mitsui, "and leading up to this festival, physical gold demand in India is quite strong.

"The difference this year is that this time there has been reports of strong demand across the globe, and given this insatiable appetite for Gold , it's no wonder prices have recovered to the $750 area.

"Expect this demand to slow if Gold approaches $800 per troy ounce," advises Mitsui, but "with another round of interest rate decisions in the US later this week, gold could find fresh legs to travel higher."

The Fed's dramatic rate cuts starting in Sept. '07 saw the Gold Price leap from $650 an ounce above $1,030 by mid-March.

Today the Central Bank of Iceland hiked its key lending rate from 12% to 18% in a bid to stall the collapse of its currency – now worth two-fifths less on the forex market than at the start of '08 – as part of the measures demanded by the International Monetary Fund (IMF).

With a total of $200 billion in reserves, the IMF has now committed one-quarter to aiding Iceland, Ukraine, Pakistan, Hungary, Belarus and Serbia.

"When you tot up the countries across the [East European & Baltic] region with external funding needs," says Neil Schering, an emerging markets strategist at Capital Economics in London, "you get to $500bn or $600bn very quickly – and that blows the IMF out of the water.

"The Fund may soon have to start calling on the West for additional funds."

This morning the Bank of England said it believes the total losses to private banks as a result of the global solvency crisis could total $2.8 trillion total losses.

The IMF forecast $945 billion this spring. Ben Bernanke – chairman of the US Federal Reserve – began the bidding in July last year at $100 billion.

"Intervention is needed in the Japanese Yen," says Steven Barrow at Standard Bank here in London, "not because it might help stabilize Japan's stock market, or because it might stem the plunge in its trade balance.

"Instead, Yen Intervention is needed in order to slow down the global de-leveraging and mass position-unwinding that's going on right now."

Global credit markets remain closed to Latin American infrastructure projects, reports Latin Finance , with Barclays Capital advising clients that while individuals countries may remain strong, "evaluating vulnerability a complicated task."

Yesterday the government of Austria was forced to cancel a new auction of sovereign bonds due to lack of demand – the third such delay to hit European states so far this month.

New finance has also dried up for mining companies worldwide, reports Martin Creamer in his Mining Weekly , knocking London's largest mineral groups 44% lower on the stock market since end-June.

Most telling for future Gold Mining Output , the top 20 junior mining stocks listed on London's Alternative Investment Market (AIM) dropped more than 50% of their value between July and Oct.

No fresh funds were raised by new issues of AIM mining shares, and secondary issues raised just £6.1 million ($9.5m) in September.

"In just three months, the value of Aim's mining universe has more than halved," notes Dr.Tim Williams, director of mining-and-metals analysis at Ernst & Young. "Access to new capital for those without great projects, is, at least for the time being, closed."

For many junior exploration firms, Dr.Williams says, the situation is now "nearing critical".

Last night the head of South Africa's Harmony Gold – the world's fifth largest gold miner by ounces – said he's no longer looking to expand via early-stage projects, but rather through buying already-productive mines.

"Probably 12 months ago we were looking at exploration properties and early projects," said the CEO, Graham Briggs, to MiningMX.com . "Now we're looking more towards the production side of things."

Gold Mining production worldwide fell 6% during the first-half of the year compared with H1 2007, the World Gold Council said Monday.

Totaling just 590 tonnes between April and July, global gold mining output was the lowest since 1996 according to data from the US Geological Survey.

The Spot Gold Price in US Dollars has more than doubled since world gold mining production peaked in 2003.

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