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
Why Most Investors LOST Money by Investing in ARK FUNDS - 27th Jan 22
The “play-to-earn” trend taking the crypto world by storm - 27th Jan 22
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and Silver Reverse Dollar Bounce on Profit-Taking

Commodities / Gold and Silver 2010 Oct 26, 2010 - 07:46 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD unwound yesterday's 1.5% gain vs. the Dollar in Asian and London trading on Tuesday, slipping as the US currency recovered from sharp losses against crude oil, world equities and the Euro.

"Gold was well offered" at the start of London trading today, says one dealer.


Silver prices slipped faster, reversing all of Monday's 2.2% rally.

"The selling is profit-taking," reckons Bernard Sin of Swiss refinery MKS's Finance division, speaking to Bloomberg.

"Gold has come so far. In the medium term, the Dollar correlation will continue."

Averaging a daily correlation to the Euro/Dollar exchange rate of virtually zero over the first 9 months of the year, the Dollar price of spot gold now shows a near-perfect correlation of +0.95 with the Euro for Oct. so far.

That number would read +1.0 if they moved precisely in lockstep.

"Strong profit taking" in futures and options, plus falling inflows of money into ETF gold trusts, saw gold investment in the developed world drop by 1% last week according to latest data from London's VM Group consultancy.

Buyers in India, in contrast – still the world's No.1 source of physical gold demand, continuing to outstrip China – are using the pull-back to buy gold ahead of next month's Hindu festivals, according to dealers.

"Trading sentiment turned bullish on emergence of buying by retail customers for upcoming Dhanteras and Diwali festivals, which witness maximum consumption of the precious metals," says the Hindu Times.

Commerzbank analysts reckon Indian gold imports could breach 100 tonnes this month alone, easily matching 2009's total of 340 tonnes.

UBS last week saw its third-highest sales to India so far this year, says metals strategist Edel Tully in a report.

"Physical demand at the levels we saw on Friday is usually an indicator that gold's price trough is very near.

"[Gold buying] should remain healthy."

Back in the West, European stock markets sagged this morning following weak corporate earnings reports.

Swiss investment bank UBS missed third-quarter revenue forecasts by almost one-third, surprising analysts with a pre-tax loss despite the first rise in wealthy-client inflows since 2008.

London's FTSE100 also fell, dropping 0.9% after strong UK growth data – nearly twice analyst forecasts at 0.8% between July and Oct. – meant a "likely delay to a further bout of quantitative easing" by the Bank of England, according to one City economist.

Gilt prices fell, pushing 10-year yields more than 0.12% above last week's new record low of 2.94%.

The Pound jumped towards $1.59, squashing the price for UK investors looking to buy gold below £840 an ounce, just above a 3-week low.

Versus the Euro and Japanese Yen, however, the Pound rose only to 1-week highs.

"If the Dollar is just about fully-priced for more Fed quantitative easing," says Steven Barrow, currency strategist at Standard Bank, "could the market start to look at the next QE domino to fall?

"A figure we hear more and more [for the Bank of England] is £50bn, whether from pressure groups like the British Chamber of Commerce, or private-sector economists. This amounts to 25% of the [outstanding QE] amount...not too dissimilar to the size of QE expected at the Fed.

"If this happens, it could be the Pound that's about to topple."

US central banker Thomas Hoenig – who has voted against every Fed decision so far this year – yesterday called QEII "a dangerous gamble...risk[ing] the next crisis four or five years from now."

By Adrian Ash

BullionVault.com

Gold price chart, no delay   |   Buy gold online at live prices

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