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
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 Trades Higher as U.S. Debt Mountain Set to Soar

Commodities / Gold & Silver Nov 14, 2008 - 09:41 AM GMT

By: Adrian_Ash

Commodities Best Financial Markets Analysis ArticleTHE WHOLESALE PRICE OF GOLD traded internationally jumped late-morning in London dealing on Friday, rising 5.4% from yesterday's three-week low against the Dollar and touching a five-week high above £500 an ounce for British investors.


World equities caught up with one-half of Thursday's near-7% gain in US stocks, while crude oil ticked lower from $58 per barrel.

Government bond prices rose, pushing 10-year US Treasury yields down eight points to 3.77%. Wild volatility on the currency markets left the major cross unchanged from the start of Asian trade, despite news that Germany – Europe's largest economy, and third in the world after the US and Japan – officially slid into recession by end-Sept.

" Gold found support at the $700 level yesterday," notes Friday's comment from Mitsui, the precious metals dealer in London.

"Given the strong physical demand globally, expect the $680-$700 area to remain key support for the short term."

But "some investors aren't convinced the rally will be sustained," reckons Wallace Ng, a Gold Bullion and silver trader in Hong Kong for Fortis Bank, "because the Dollar may strengthen and no one worries about inflation now."

Inflation in Europe held flat between Sept. and Oct., new data showed today, with the cost of living rising 3.2% year-on-year on average for the region's 320 million citizens.

Month-on-month, today's US import price inflation was expected to show a 4% drop.

"Discipline in the global economy is needed to foster stability and help balance short-term and long-term prosperity more appropriately," said Jean-Claude Trichet – head of the European Central Bank (ECB) – in a speech ahead of this weekend's G20 summit of world leaders in Washington.

Now widely reviled for raising interest rates on the Euro in July to fight inflation – even as the world's largest economic zone was beginning to contract – M.Trichet spoke at length on the "exceptional liquidity support by central banks" to the financial sector.

But "if we are to 'build together the capitalism of the future,' as [French president] Sarkozy puts it," writes economist and author Judy Shelton for the Wall Street Journal today, "the world needs sound money.

"Does that mean going back to a Gold Standard , or gold-based international monetary system? Perhaps so; it's hard to imagine a more universally accepted standard of value."

( To learn more about the Gold Standard & Its Demise read here... )

"China should have at least several thousand tons of gold in its reserves, five to six times the officially announced 600 tonnes," said Hou Huimin, vice-chair of the China Gold Association, to Bloomberg News in Beijing today.

At today's AM Gold Fix , Beijing's official gold-hoard of 600 tonnes was worth just $14 billion – less than 1% of its total foreign currency reserves of $1.9 trillion, the vast bulk of it held in US Treasury bonds and notes.

"There's no doubt that gold would be attractive," reckons Kenichiro Ikezawa, manager of $3 billion in assets at Daiwa SB Investments in Tokyo, "as US debt is likely to swell.

"In the long term, both the Dollar and Treasuries will probably weaken. It's possible that China will buy more gold, though the country is likely to do so gradually."

The US Treasury yesterday reported an all-time record budget deficit for October, with outlays outweighing income by $237 billion.

Thanks to the Treasury buying $115 billion of equity in major private banks – as well as $21.5bn of mortgage-backed securities from Fannie Mae and Freddie Mac – government spending accounted for $1 in every $3 spent in the US economy last month.

Gold Mining production, in contrast, continues to contract, and now "over 80% of current mined gold production is over 15 years old," reports Lawrence Williams for MineWeb today after attending RBC's gold seminar in London.

"Some big mines are nearing the ends of their days, ore grades are falling, underground mines keep getting deeper, costs are rising and junior gold exploration has come to an abrupt halt" thanks to the global credit crunch hitting higher-risk fund raising.

Pierre Lassonde – the veteran gold analyst, co-founder of Franco Nevada Mining, acting chairman of the World Gold Council (WGC), and former head of world No.2 Newmont Mining – told the conference that global Gold Mining production is likely to fall around 7% over the next few years, "possibly more."

Despite near-term risks due to the ongoing financial turmoil affecting all investment flows outside government bonds, "Gold's fundamentals on the supply/demand side remain strong in terms of being price supportive," he believes.

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.


Comments

melinda penner
15 Nov 08, 15:19
gold set as payback to china for 1.9 trillion debt

check this possible scenario out.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules