Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Resists Strong U.S. Dollar

Commodities / Gold and Silver 2010 Feb 22, 2010 - 07:44 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD in the wholesale bullion market slipped from an early 1-month high Monday morning, trading 2.1% above last week's start as strong gains in Japanese and Chinese stocks failed to carry over onto European bourses.

US crude oil contracts hit $80.00 per barrel, and the Euro gave back half-a-cent of Friday's 2¢ surge.


Ticking back towards last week's 9-month lows at $1.3450, the weakening Euro kept gold prices for German, French and Italian traders within 0.5% of Friday's new record high.

"Light physical selling was seen at the top," said one Hong Kong gold dealer in a note this morning, adding that "Chinese participants were still on the side-lines" on their first day back after last week's New Year celebrations.

Recording an AM Gold Fix in London today at $1119.75 an ounce – some $11.50 below the sharp peak hit at the start of Asian dealing – the price of gold hit its best level against the British Pound since early Dec.'s record high.

"Despite a flurry of news which should have caused the precious metals to decline, gold has resisted the firming of the US Dollar quite well," notes MKS Finance, a division of the Swiss refining group.

"That resistance levels in gold [at $1125] were tested last week – with both the IMF and Federal Reserve making bearish headlines – was an impressive display of strength," agrees a London gold dealer.

"It suggests gold is regaining some footing as an alternative asset."

"The tone [of gold investment] changed in 2009," writes Rhona O'Connell at MineWeb, commenting on the World Gold Council's analysis of data from her GFMS consultancy.

"Allocated bullion accounts advanced at the expense of unallocated accounts, while there was evidence of increased activity on the part of hedge funds and other 'non-traditional' institutions."

Allocated gold means physical bullion, owned by the customer. Unallocated accounts, in contrast, do not charge the client for storage, making them cheaper and more "commonly used" as the London Bullion Market Association explains on its website.

But "the client is an unsecured creditor" of the account provider, notes O'Connell, and so "while uncertainty persists over elements of the financial sector, allocated accounts are likely to continue to command interest."

New data released by US regulator the Commodity Futures Trading Commission after Friday's close showed speculative, non-industry traders slashing their bullish position in gold futures and options to the smallest level since Sept. 1st in the week to last Tuesday (16 Feb.).

The CFTC's Commitment of Traders report says that, as a group, hedge funds and other large speculators cut their "net long" betting (i.e. bull minus bear contracts) to the equivalent of 601 tonnes on the US derivatives market.

It peaked equal to 873 tonnes of gold in mid-Oct., and was 25% greater at 752 tonnes as recently as late Jan.

So-called "commercial traders" acting for bullion banks, miners and the refining industry meantime cut their naturally bearish position on gold last week to the lowest level since mid-July as a proportion of their total bets.

"World Gold Council analysis suggests that the longer-term views of allocated holders tend to reflect the [gold market's] fundamentals in terms of inflation, economic and exchange rate uncertainty," says O'Connell at MineWeb today.

Over on the forex market early Monday – where the "net short" position against the Euro held by speculators reached a new record last week – the Dollar weakened against the Japanese Yen, but ticked higher against all other major currencies.

Government bond prices were little changed, holding 10-year US Treasury yields at 3.79%.

Here in London, UK gilts traded near Friday's 15-month low, keeping 10-year yields up above 4.25%.

"$1,100 is a level being looked at" in gold, says Saxo Bank analyst Ole Hanson, speaking to Reuters.

"If we can hold it there could be further gains to be made as news from Greece unfolds."

Germany's Der Spiegel reports that the Berlin government has drafted plans for a Greek aid package of €20 billion, the cost to be split by Eurozone member states, with Germany's share – reckoned to cost up to €5bn – paid through its state-owned KFW bank.

Athens last week asked the European Union for specific details of how a rescue would work, following the failure of finance ministers to agree anything beyond a statement of "support".

The Netherlands' coalition government meantime fell apart on Saturday, split over the issue of Dutch troops in Afghanistan.

French oil refineries owned by Total remained closed for the fifth day running in a dispute over job losses. Union leaders called for the action to be "intensified and extended", warning that French fuel shortages could follow.

By Adrian Ash
BullionVault.com

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
Formerly 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 2010

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.


© 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