Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
INTEL (INTC) Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 18th Jan 20
Gold Stocks Wavering - 18th Jan 20
Best Amazon iPhone Case Fits 6s, 7, 8 by Toovren Review - 18th Jan 20
1. GOOGLE (Alphabet) - Primary AI Tech Stock For Investing 2020 - 17th Jan 20
ERY Energy Bear Continues Basing Setup – Breakout Expected Near January 24th - 17th Jan 20
What Expiring Stock and Commodity Market Bubbles Look Like - 17th Jan 20
Platinum Breaks $1000 On Big Rally - What's Next Forecast - 17th Jan 20
Precious Metals Set to Keep Powering Ahead - 17th Jan 20
Stock Market and the US Presidential Election Cycle  - 16th Jan 20
Shifting Undercurrents In The US Stock Market - 16th Jan 20
America 2020 – YEAR OF LIVING DANGEROUSLY (PART TWO) - 16th Jan 20
Yes, China Is a Currency Manipulator – And the U.S. Banking System Is a Metals Manipulator - 16th Jan 20
MICROSOFT Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 15th Jan 20
Silver Traders Big Trend Analysis – Part II - 15th Jan 20
Silver Short-Term Pullback Before Acceleration Higher - 15th Jan 20
Gold Overall Outlook Is 'Strongly Bullish' - 15th Jan 20
AMD is Killing Intel - Best CPU's For 2020! Ryzen 3900x, 3950x, 3960x Budget, to High End Systems - 15th Jan 20
The Importance Of Keeping Invoices Up To Date - 15th Jan 20
Stock Market Elliott Wave Analysis 2020 - 14th Jan 20
Walmart Has Made a Genius Move to Beat Amazon - 14th Jan 20
Deep State 2020 – A Year Of Living Dangerously! - 14th Jan 20
The End of College Is Near - 14th Jan 20
AI Stocks Investing 2020 to Profit from the Machine Intelligence Mega-trend - Video - 14th Jan 20
Stock Market Final Thrust - 14th Jan 20
British Pound GBP Trend Forecast Review - 13th Jan 20
Trumpism Stock Market and the crisis in American social equality - 13th Jan 20
Silver Investors Big Trend Analysis for – Part I - 13th Jan 20
Craig Hemke Gold & Silver 2020 Prediction, Slams Biased Gold Naysayers - 13th Jan 20
AMAZON Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 11th Jan 20
Gold Price Reacting to Global Flash Points - 11th Jan 20
Land Rover Discovery Sport 2020 - What You Need to Know Before Buying - 11th Jan 20
Gold Buying Precarious - 11th Jan 20
The Crazy Stock Market Train to Bull Eternity - 11th Jan 20
Gold Gann Angle Update - 10th Jan 20
Gold In Rally Mode Suggests Commitment of Traders (COT) Data - 10th Jan 20
Disney Could Mount Its Biggest Rally in 2020 - 10th Jan 20
How on Earth Can Gold Decline During the U.S. – Iran Crisis? - 10th Jan 20
Getting Your HR Budget in Line - 10th Jan 20
The Fed Protects Gamblers at the Expense of the Economy - 9th Jan 20
Last Chance to Get Microsoft Windows 10 for FREE! - 9th Jan 20
The Stock Market is the Opiate of the Masses - 9th Jan 20
Is The Energy Sector Setting Up Another Great Entry? - 9th Jan 20
The Fed Is Creating a Monster Bubble - 9th Jan 20
If History Repeats, Video Game Stocks Could Soar 600%+ - 9th Jan 20
What to Know Before Buying a Land Rover Discovery Sport in 2020 - 8th Jan 20
Stock Market Forecast 2020 Trend Analysis - 8th Jan 20
Gold Price at Resistance - 8th Jan 20
The Fed Has Quietly Started QE4 - 8th Jan 20
NASDAQ Set to Fall 1000pts Early 2020, and What it Means for Gold Price - 8th Jan 20
Gold 2020 - Financial Analysts and Major Financial Institutions Outlook - 8th Jan 20
Stock Market Trend Review - 8th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold Steady as UK Slashes Interest Rates to 57-Year Low

Commodities / Gold & Silver Nov 06, 2008 - 07:18 AM GMT

By: Adrian_Ash

Commodities THE SPOT MARKET PRICE of Gold held steady in London on Thursday morning, trading just shy of $745 per ounce as world stock markets sank to a one-week low and UK interest rates were slashed to their cheapest level in more than five decades.

"The bears are back in full control," says Walter de Wet at Standard Bank in Johannesburg, "after bulls across the globe realized that current economic problems cannot be voted away.


"The loss in confidence and accompanied fear is weighing heavily on commodities."

Following hot-on-the-heels of Wall Street's 5% drop and a 7% loss in most Asian stock markets overnight, the FTSE100 index of blue-chip UK equities sank 200 points to a five-session low in morning trade.

The Dax index in Frankfurt dropped 230 points to stand 8.5% below this point in Oct.

Crude oil fell back towards $64 per barrel, while copper and zinc futures both lost 5% from their opening levels in London.

Government bond prices rose sharply worldwide, pushing the yields paid to investors lower.

"Gold's failure yesterday created a double top in the Dec. Gold Futures contract at the $770 area," says today's technical note from Mitsui, the precious metals dealer in London.

"The move below $750 has increased the physical off-take [for jewelry, industrial and physical Gold Investment use], and this should support the market in the short term. Look for minor support at the $733 area followed by major support at $720."

On the data front this morning, UK house prices were reported 14.9% lower in Oct. from 12 months before – a record rate of collapse – while car sales fell at their fastest pace in 17 years.

Over in Germany – the world's third largest economy – new factory orders sank 8% in Sept. from Aug. the official data agency said this morning, wildly outpacing analyst forecasts.

Late last month, truck-maker Volvo reported European sales of just 115 units for the third quarter, down from almost 42,000 trucks sold between July and Oct. 2007.

"The risks to inflation have shifted decisively to the downside," said the Bank of England as its slashed UK interest rates by 1.5% this morning – the deepest one-day cut in 24 years.

Now costing just 3.0% per year from the Bank of England, the British Pound is now cheaper to borrow than at any time since the post-war low of 1951. Yet ahead of the European Central Bank's decision due at 12:45 GMT, the British Pound fell only briefly on the forex market, dipping to $1.5750.

That helped the Gold Price in Sterling hold above £466 an ounce. For Eurozone gold investors, the price stuck at €574.

"After the world rally on the day of the US presidential election, investors have now shifted their focus to how fast, and how well the new administration will address the current economic issues," reckons Yoo Soo-Min, an analyst with Hyundai Securities in Seoul, speaking to Reuters.

President-elect Obama is now rumored to be selecting his administrative team, starting with a Treasury secretary to replace the discredited former Goldman Sachs CEO – and key supporter of the $700 billion banking bail-out – Henry Paulson.

Candidates are said to include Timothy Geithner – president of the New York Fed and a regular supporter of low US interest rates – as well as former Treasury Secretary Lawrence Summers (now a Harvard professor) and even arch-inflation-fighter and former Fed chairman Paul Volcker.

Now in its final 60 days, the Bush administration yesterday moved to push through a $25 billion support package for US auto-makers. House of Representatives speaker Nancy Pelosi wants that package increasing to $61bn "with no strings attached."

Today in Tokyo, Japan's Toyota Motor Corp. cut its profit forecast in half, predicting a nine-year low ¥600 billion for the year to end-March vs. a previous forecast of ¥1.6 trillion.

Tokyo stock-brokers had expected to see operating profits of €1.34trn.

Meantime in the Gold Mining sector today, Randgold Resources – the London-listed African gold miner – reported third-quarter output down 12% from April-to-June.

Cash-costs per ounce rose by one-eighth.

Over in Caracas, Venezuela yesterday, the socialist government of Hugo Chavez announced that it's seizing control of the giant Las Cristinas project belonging to Canadian Gold Miner Stock Crystallex.

After seizing control of steel, energy and cement-producing assets deemed to be "strategic", mining minister Rodolfo Sanz told a radio interviewer that the 16-million-ouunce mine "will be recovered and will be operated under state administration."

Crystallex stock – already trading 90% down from this time last year – dropped by almost one-half on the news.

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