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
Inflation Consequences for the Stock Market, FED Balance Sheet - 24th Oct 21
To Be or Not to Be: How the Evergrande Crisis Can Affect Gold Price - 24th Oct 21
During a Market Mania, "no prudent professional is perceived to add value" - 24th Oct 21
Stock Market S&P500 Rallies Above $4400 – May Attempt To Advance To $4750~$4800 - 24th Oct 21
Inflation and the Crazy Crypto Markets - 23rd Oct 21
Easy PC Upgrades with Motherboard Combos - Overclockers UK Unboxing - MB, Memory and Ryzen 5600x CPU - 23rd Oct 21
Gold Mining Stocks Q3 2021 - 23rd Oct 21
Gold calmly continues cobbling its Handle, Miners lay in wait - 23rd Oct 21
US Economy Has Been in an Economic Depression Since 2008 - 22nd Oct 21
Extreme Ratios Point to Gold and Silver Price Readjustments - 22nd Oct 21
Bitcoin $100K or Ethereum $10K—which happens first? - 22nd Oct 21
This Isn’t Sci-Fi: How AI Is About To Disrupt This $11 Trillion Industry - 22nd Oct 21
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Holds in $5 Range as Yen Rises Again; Link with Oil Prices Weakening; Gold Mining Output Falling "Much Faster" than Expected

Commodities / Gold & Silver Nov 16, 2007 - 08:37 AM GMT

By: Adrian_Ash

Commodities

SPOT GOLD PRICES held steady in a $5 range early Friday, rising above $790 per ounce by the Morning Fix in London but standing more than 5% below their level of this time last week.

"After yesterday's sell-off, the Gold Market will be watching closely for the next move," said Standard Bank's gold note from Johannesburg earlier.


"There are likely to be stop-losses in place, and investors are nervous...but there are also investors and funds who might see the latest correction as a buying opportunity."

On a technical basis, "the three-month trendline provided very nice support," says Phil Smith for Reuters India, pointing to Thursday's low at $782 per ounce, "and it should continue to do so."

On the currency markets today the US Dollar continued its slide against the Japanese Yen that began on Nov. 1st. It was trading just above ¥110.00 as the New York open drew near, the 18-month low it first hit last week.

The Euro meantime whipped around $1.4600, while the Canadian Dollar added to its losses for the week. The Loonie has now dropped more than 7% versus the USD since hitting all-time record highs on Nov. 7th – the culmination of a four-year surge. That kept the Gold Price for Canadian investors above C$775 per ounce, a six-month high.

The British Pound also slipped in early trade, failing to consolidate an overnight rally and dropping back to $2.0430. Sterling has now lost 3.4% against the US Dollar from its quarter-century highs of Friday last week.

For British investors wanting to Buy Gold Today , the metal rose 1% from Thursday's two-week low to trade at £388 per ounce by mid-morning in London .

The Gold Price in Sterling hit an all-time record high of £403 per ounce on Weds 7th Nov. On its trade-weighted index, the British Pound has dropped 2.5% of its value against the world's major currencies since then.

It's lost 5.6% of its value so far in 2007.

Copper futures also fell overnight, nearing their third weekly drop on the run as mines in Chile – the world's largest producer – re-opened after an earthquake. Soft commodities rose in Asian trade, with soybean prices hitting a new 19-year high. Crude oil was little changed after yesterday's $2 sell-off below $94 per barrel of US sweet and light.

"The rebound in US crude stockpiles [reported Thurs], due in part to a one-off backlog of imports, was less bearish than it appeared," believes Antoine Halff, head of energy analysis at Fimat in Houston, a division of Société Générale.

The rise in US oil inventories reported for last week "was focused on the relatively insulated West Coast," Halff adds. But the National Weather Service now predicts above-average temperatures across the United States for winter 2007/08. Private forecasts put snowfall at just 60% of average.

"Last year the oil price was the key to the Gold Market ," says John Hill, metals and mining analyst with Citigroup in San Francisco . "This year gold and broader equities have been closely linked. [Now] the negative correlation with the Dollar is being reasserted while a temporarily strong relationship with the overall market is weakening."

Looking further ahead, "we are maintaining our bullish outlook for gold into 2008," says Michael Lewis, head of commodity research at Deutsche Bank in London .

"We believe the next two months will present another opportunity to accumulate long exposure given the tendency for the US Dollar to strengthen in the first four weeks of a New Year."

Extended Gold Price depreciation would be welcomed by Indian jewelry buyers, meantime. "Markets in Gujarat have just opened today after a five-day gap," says Anuraag Mewada, head of Zaveri and Co. in Ahmedabad, "and still there are no buyers ahead of the wedding season."

The Indian wedding season – beginning now the festival of Diwali has ended – will run until February. But "the recent spike in Gold Prices has kept wholesalers and retailers away," Mewada told the AFX newswire earlier.

Indian jewelry and investment demand accounted for some 22% of physical gold-sales last year. Between July and Sept., reports the Hindu Business Line today, jewelry demand totaled 134.8 tonnes – a rise of 5% from last year. Net retail investment at 50.3 tonnes showed an increase of 4 per cent year-on-year.

On the supply side of the Gold Market , however, mining companies continue to face rising costs and struggling output. Greg Wilkins, CEO of Barrick – the world's largest gold-mining company – told a conference in London on Thursday that "global mine supply is going to fall at a much faster rate than people generally believe."

Now Graham Briggs, the new head of Harmony Mining – the world's fifth-largest producer – has told Mining Weekly that he might suspend continuous operations at those sites failing to hit production targets.

Harmony just ran due diligence on six major operations to establish whether "conops" had met the target of increasing production by 26% or more without damaging safety.

"Probably the poorest performing conops production unit is Masimong," says Briggs, "where conops was introduced with no benefit at all. What we are doing is trying to fix it up before we see if we actually have to pull the plug."

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 2007

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