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

Investors "Accumulating Gold" as Recession Hits

Commodities / Gold & Silver Nov 07, 2008 - 08:54 AM GMT

By: Adrian_Ash

Commodities SPOT GOLD PRICES held steady again early Friday, recording an AM Gold Fix in London of $745 an ounce and standing 1.5%, 3.6% and 0.7% higher from the end of last week against the Dollar, Sterling and Euros respectively.

"We are now at a lower range," said William Kwan, head of bullion trading at Gold Capital Management in Singapore, to Reuters earlier.


"I believe there's a lot of demand from short-term speculators around the $700 to $720 level. They might be accumulating gold slowly,"

"A lot of people are still buying Gold Coins . Retail investors are very happy to buy at these levels."

New analysis from Standard Bank in Johannesburg today showed that the net long of speculative players in the US Gold Futures market reached a six-year low at the end of Oct.

The outright number of speculative short positions – betting that the Gold Price will fall – reached a nine-year high.

"This suggests that, if a short-covering rally is triggered [by rising prices] in the near future, it could well be a sharp one," says Standard Bank's Precious Metals Monthly .

Over on the equities market today, Japan's Nikkei index bounced hard from an early 8% drop to close the week unchanged. Overall, the FTSE Asia-Pacific index dropped 1.4% for the session.

A bounce in oil prices to $62.50 per barrel from Thursday's 17-month low helped energy stocks rise up to 6% in Europe.

London's FTSE100 index halved an early 2% gain as British government bond prices rose further after yesterday's shock cut to UK interest rates.

The Bank of Korea today cut its key lending rate for the third time in a month, even after the by 25 basis-points to 4.0%,

The number of UK companies becoming insolvent jumped 26% during the July-Oct. period, the Insolvency Service said this morning, reaching a four-year high of 4,001. Almost two-thirds were voluntary.

Across the Irish Sea, the mayor of Dublin will switch on the capital's Christmas Lights this Sunday – three weeks ahead of schedule – in a bid to boost retail sales.

"We're not expecting good US payroll numbers today," said Bernard Sin, head of forex and metals trading at Swiss refinery MKS in Geneva, to Bloomberg earlier.

"Gold is reacting to that."

But while the actual US report for Oct. showed a loss of 240,000 jobs just as Wall Street opened for business – and while the unemployment rate jumped to a 14-year high of 6.5% – both gold and the US Dollar were initially unmoved on the news.

The Euro had earlier risen 2¢ to $1.2850, but it remained inside the down-channel vs. the US Dollar it began in mid-July.

The Japanese Yen meantime pushed higher against all other world currencies, knocking the Dollar back to ¥97.20 and capping the British Pound at ¥154 – almost one-third below Sterling's level of four months ago.

For UK investors looking to Buy Gold today the price briefly touched £475 an ounce in the wholesale spot market.

The Gold Price in Euros held just below €580 per ounce.

"The marriage season has just begun in India," noted Bachhraj Bamalwa at Nemchand Jewelers in Kolkata to the Business Standard today, "and while it is too early to say much, there is tremendous potential for business.

"Customers are still waiting for the right time and for the Gold Price to decline further," he added.

Indian Gold Prices have fallen by almost one-fifth since reaching new all-time peaks in early Oct. But "due to the money crunch," counters a jeweler working across Gujarat, Mumbai and Gurgaon, "customers are not buying any extra items and limiting their purchases."

Gold premiums charges above the international Spot Price held steady in Singapore and Hong Kong on Friday, reports Reuters. "Trade is cooling off a little, but physical demand has been very good in the past two weeks," the newswire quotes one physical dealer.

"Demand is so good in Thailand that we've seen streams of people Buying Gold at jewelry shops. We also heard people crossed over to Thailand from Cambodia, Laos and Vietnam to buy jewelery."

On the supply-side, meantime, the world's No.1 and No.3 Gold Mining companies – Barrick and AngloGold Ashanti – continued to buy back production they had already sold forward during the July to Oct. period, says Virtual Metals' latest Hedging & Financial Gold Report .

( During the bear market in gold ending at the start of this decade, gold miners worldwide sold some 110 million ounces of gold – well over 135% of annual production, as yet unmined – onto the futures market. They've since scrambled to buy it back as the price of gold tripled, helping drive a series of short-term spikes – most notably the 20% jump of April-May 2006. )

"Given that hedge reductions in 2008 have already reached 10.3 million ounces," says today's VM report – produced for Fortis, the Belgian bank – "it is possible our forecast for full-year 2008 dehedging of between 10-12 million ounces could be an underestimate.

"The obvious question remains what [world No.1] Barrick Mining will do, as their forward contracts have no fixed delivery date. But whatever happens it seems assured that 2008 will be the fifth year in six that dehedging has been over 11 million ounces."

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