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

US Dollar Rallies and Gold Fall Ahead of US Inflation Data

Commodities / Gold & Silver Dec 14, 2007 - 08:29 AM GMT

By: Adrian_Ash

Commodities

THE SPOT GOLD MARKET slipped back early Friday from a 1% bounce overnight, dropping to a new six-session low beneath $792 per ounce as the US Dollar rallied towards the Wall Street open.

Asian stock markets ended the week lower, dropping more than 3% from last Friday in Tokyo . Europe 's major bourses reversed early gains to trade flat by lunchtime in London , while US crude oil ticked higher to $92.34 per barrel.


The International Energy Agency today forecast daily world oil demand will rise 2.5% in 2008.

"We are trading in low liquidity," said William Kwan, a gold dealer with Phillip Futures in Singapore , this morning. "The market is easily pushed left to right."

"Bullishness is ample and the Gold Charts are far from hinting at a major crash," says Pradeep Unni, analyst at Vision Commodities in Dubai . "But still gold is moving quite slow, taking enough time to consolidate around [a new] range and then proceeding ahead.

On the currency markets this morning, the US Dollar hit a new six-week against the Japanese Yen above ¥113.00. That move capped selling in the Tocom Gold Market , and gold futures for delivery in Oct. '08 ended the day only 0.3% lower, equal to $808.60 per ounce.

The British Pound dropped more than two cents to the Dollar, meantime, while the Euro sank to a six-week low beneath $1.4500, limiting the drop in gold for European investors early Friday.

The Gold Price in Euros held above €545.50 per ounce. For British investors wanting to Buy Gold Today , it held above £390.50 – just shy of where it closed last week.

"The market is focused on interest rates," reckons Charles Nedoss, senior metals analyst at Peak Trading in Chicago . Pointing to Thursday's US producer price inflation data, "what came out was inflationary," he told Dow Jones Newswires overnight.

US consumer price data for last month was due out Friday at 08:30 EST.

"Normally, this would be very bullish for gold," agrees Leonard Kaplan of Prospector Asset Management, "but the PPI came in extremely hot – over 7% year on year. It is quite obvious to the world that the Fed may have made a bad mistake dropping rates and the chances for lower interest rates are diminishing quickly.

"Higher rates create a higher Dollar, which creates lower gold."

But "we're trying to deal with two polar opposite problems here," as Robert Kowit, international bond manager at Federated Investors, explained to Reuters' Investment Outlook Summit in New York yesterday. "I would say stagflation [slower growth but rising inflation] is an increasing concern for most investors."

"When we talk about what a Dollar crisis looks like, at least in my experience, it's been accompanied by a stagflationary environment." ( For a free report on What's Really Driving the Gold Market today, click here now... )

"The Dollar is at risk of a loss of caste," agrees James Grant, editor of the eponymous Interest-Rate Observer newsletter.

"The Dollar is losing its reserve currency status and deservedly so. Don't you know which country it was that exported the subprime mortgage crisis?"

Pointing to Tokyo 's refusal to acknowledge its post-bubble losses of the early 1990s – which led the Japanese economy to "stew in the juices of failure for a full decade" – the US Fed should now "let markets find a level and be a little less quick to be the federal first responder to the scene of financial accidents."

Holding cash and value stocks, Jean-Marie Eveillard – "one of the most successful long-term" investors according to MorningStar's lifetime award – now holds a 7-8% position in gold in his portfolios for the $45-billion First Eagle Funds.

Eveillard told Reuters on Thursday that he's buying gold "as insurance against one to three years of difficult economic and financial circumstances" to come.

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