Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and Silver Bloodbath Prompts Indian and Chinese Buying

Commodities / Gold and Silver 2011 May 06, 2011 - 08:55 AM GMT

By: Adrian_Ash

Commodities

WHOLESALE TRADERS looking to buy gold saw Dollar prices whip in a $10 range on Friday in London, heading into the weekend at $1488 per ounce – 5.5% below Monday's record-high spike– as European equities and global commodities stemmed their losses.

Silver bullion also rallied, bouncing from a drop below $34 per ounce but suffering its fifth daily plunge in a row, fully 31% below last Thursday's three-decade high.


New data showed a surprise jump in job creation but a rise to 9.0% in the United States' unemployment rate.

US Treasury bond prices eased back, but the Dollar was left little changed by the news.

The price to buy gold for Euro investors rose 1.6% from yesterday's 3-week low at €32,380 per kilo.

"The silver market has become even more unhinged as the week nears an end," reckons UBS strategist Edel Tully.

"[Yesterday] was another 'bloodbath' day for the precious metals," says a note from MKS Finance in Switzerland – "a real one-way street" of selling.

"It's panic," says Michael Shaoul at the $1 billion Marketfield asset managers in New York, speaking to Bloomberg about this week's broader commodity sell-off.

"It's a classic liquidation move in a crowded trade."

UK Brent crude oil stabilized its 6% drop for the week at $110 per barrel.

End-March saw global investor holdings of raw materials rise 50% year-on-year to a record peak of $412 billion, according to Barclays Capital.

"Was silver a bubble?" asks BNP Paribas's Stephen Briggs today. "I think to a large extent it was."
 
"Everyone is taking the view that commodities will have some sort of big shake-up," says head of sales Peter Hillyard at ANZ, also quoted by Reuters, "and you'd be foolish to think otherwise."

"This argument will be hard to resist, but should be," forecast GMO asset management's Jeremy Grantham in a recent client letter.

"A second commodity collapse [after the 2008 plunge] may be psychologically hard to invest in...[But] in the next decade, the prices of all raw materials will be priced as just what they are, irreplaceable."

Today in India – the world's No.1 private gold buyer each year –"The weakening trend has hardly impacted retailers activity" ahead of tomorrow's peak spring gold buying festival, says one Delhi-based jeweler, speaking to the Economic Times.

Markets in the city of Lucknow are "full with activity on the eve of Akshay Tritiya, the day when buying gold or silver is considered to be extremely auspicious," says the Times of India.

"The response [to the dip in global gold prices] is just overwhelming," says PC Jewellers' Group director Balram Garg in New Delhi, speaking to NDTV.

"We are catering to a huge rush at our showrooms across the country," says Garg, forecasting sales growth of 30-40% from the festival's already strong levels in 2010.

"Asian investors bought the dip [but] gold is now below $1500," notes Standard Bank's commodity team here in London today – "a level we’ve been targeting for some time.

"We see better value in a long gold position here [but] our bias still favours more downside...closer to $1450."

Another wholesale dealer reports "decent Chinese buying in silver overnight," with 25 million ounces being bought at Friday morning's "limit down" price drop of 8% – the maximum daily move allowed by the Shanghai precious metals exchange.

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 2011

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.


© 2005-2022 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