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
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
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

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Hits New 7-Week High as Ex-Hedger Barrick Forecasts Higher Prices to Come

Commodities / Gold and Silver 2010 Aug 19, 2010 - 08:07 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD in London's wholesale market reached new 7-week highs for Dollar investors Thursday lunchtime, rising above $1234 an ounce as bond prices slipped and commodities held flat.

Silver prices were little changed around $18.50 an ounce, while Western stock markets cut an earlier 0.5% gain following worse-than-expected US jobless claims data.


"Consolidation above $1190 is bullish [for gold]," says a note from Barclays Capital, quoted by Reuters, "and we continue to expect resistance at $1242 eventually to give way and gold to test $1350 later in the year."

"The technical picture for gold is looking quite strong at the moment," agrees a London dealer. "There is little major resistance from here to the record highs of June."

Even at current levels, "We don't expect scrap selling to become a dominant force soon," says Standard Bank, but "with the gold price around $1230, gold physical demand continues to slow, and we expect this to remain the case."

Gold Trading in India, the world's No.1 consumer market remains typically quiet, says the Economic Times today, ahead of the autumn festival season starting later this month.

"These price levels are dissuading buyers," the paper quotes one Mumbai bank dealer.

Local bullion prices today rose to the equivalent of US$1265 an ounce, says the Times of India – a 7-week high more than 3% above this morning's spot gold prices in London, heart of the world's wholesale bullion market.

Local gold prices are also rising sharply across the border in Nepal, the Himalayan Times reports, with the central bank's cap on physical imports and bank sales pushing gold above the equivalent of US$1300 per ounce.

"Economic conditions [globally] are more likely to increase gold prices than the other way around," said Peter Munk, chairman of the world's largest gold miner, Barrick Mining, in a Bloomberg interview today.

Defending Barrick's much-criticized hedge book of forward sales – and saying he sees no need to hedge again any time soon – "Conditions were so dramatically different a decade ago, two decades ago," Munk went on.

Barrick's forward sales, built up during the bear market of the 1990s, peaked at an outstanding position of 750 tonnes in 2001 according to VM Group data. It was closed in late 2009, with gold some 265% more expensive to buy.

"We hedged [future production] for 10 years and it paid off," says Munk.

Since Barrick's hedge book was closed last October, its stock has gained 22%, very nearly matching the rise in spot gold on the wholesale, professional market. Over the previous eight years, Barrick shares rose by 120%, underperforming gold by more than one-half.

Over on the currency markets meantime on Thursday, the Euro rallied from near 4-week lows vs. the Dollar beneath $1.28.

Eurozone investors wanting to buy gold saw the price slip from a fresh 5-week high above €30,960 per kilo.

The gold price in Sterling also fell from its strongest level since 15 July – dropping 1.1% from £793 an ounce – as British Pound shot higher on stronger-than-expected UK retail sales and money-supply growth, plus below-forecast government borrowing for July.

Once again reversing the previous day's losses, however, Sterling then failed to hold above $1.5650 however for the fourth session running.

Government bonds also edged back as equities rose, slipping from Wednesday's record levels and nudging up Japanese yields from 7-year lows.

US yields bounced from their lowest level since the stock-market hit a 12-year low in March 2009.

Ten-year German Bund yields ticked higher from yesterday's new record low of 2.30%.

"I am going to sell bonds short," said best-selling investment author and hedge-fund legend Jim Rogers to the Financial Times last week – "but I'm not going to short them now because the central banks have more money than I do.

"If the economy gets worse, then they are going to print money, which is good for silver and gold. If the economy gets better, more commodities will be bought."

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