Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
An Update on the End of College… and a New Way to Profit - 16th Sep 21
What Kind of Support and Services Can Your Accountant Provide? Your Main Questions Answered - 16th Sep 21
Consistent performance makes waste a good place to buy stocks - 16th Sep 21
Dow Stock Market Trend Forecasting Neural Nets Pattern Recognition - 15th Sep 21
Eurozone Impact on Gold: The ECB and the Phantom Taper - 15th Sep 21
Fed To Taper into Weakening Economy - 15th Sep 21
Gold Miners: Last of the Summer Wine - 15th Sep 21
How does product development affect a company’s market value? - 15th Sep 21
Types of Investment Property to Become Familiar with - 15th Sep 21
Is This the "Kiss of Death" for the Stocks Bull Market? - 14th Sep 21
Where Are the Stock Market Fireworks? - 14th Sep 21
Play-To-Earn Cryptocurrency Games Gain More and Is Set to Expand - 14th Sep 21
The CashFX TAP Platform - Catering to Bull Investors and Bear Investors Alike - 14th Sep 21
Why every serious investor should be focused on blockchain technology - 13th Sep 21
SPX Base Projection Reached – End of the Line? - 13th Sep 21
There are diverse ways to finance the purchase of a car - 13th Sep 21
6 Tips For Wise Investment - 13th Sep 21 - Mark_Adan
Gold Price Back Below $1,800! - 10th Sep 21
The Inflation/Deflation debate wears on… - 10th Sep 21
Silver Price seen tracking Copper prices higher - 10th Sep 21
The Pitfalls of Not Using a Solicitor for Your Divorce - 10th Sep 21
Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
This Boom-Bust Cycle in US Home Ownership Should Give Home Shoppers Pause - 9th Sep 21
Stock Market September Smackdown Coming Next? - 9th Sep 21 - Monica_Kingsley
Crazy Crypto Markets How to Buy Bitcoin, Litecoin for Half Market Price and Sell for TRIPLE! - 8th Sep 21
Sun Sea and Sand UK Holidays 2021, Scarborough in VR 180 3D! - 8th Sep 21
Bitcoin BTC Price Detailed Trend Forecast Into End 2021 - 8th Sep 21
Hyper Growth Stocks - This billionaire is now using one of our top strategies - 8th Sep 21
6 common trading mistakes to avoid at all costs - 8th Sep 21
US Dollar Upswing, S&P 500 and Nasdaq Outlook - 7th Sep 21
Dovish Assassins of the USD Index - 7th Sep 21
Weak August Payrolls: Why We Should Care - 7th Sep 21
A Mixed Stock Market - Still - 6th Sep 21
Energy Metals Build Momentum; Silver & Platinum May Follow - 6th Sep 21
What‘s Not to Love About Crypto Market Fireworks - 6th Sep 21
Surging US Home Prices and Gold – What’s the Link? - 6th Sep 21
S&P 500 Rallies To New All-Time Highs – Are The Markets About To Break Higher? - 5th Sep 21
Bond Conundrum - Boom or Bust for Gold? - 5th Sep 21
How the sale of a Sting CD sparked an Entire Online Industry - 5th Sep 21
Three Years of Fresh Thinking With Scott Dylan and Dave Antrobus - 5th Sep 21
Bitcoin Bear Market Trend Forecast 2021 and Model Crypto Portfolio Buying Levels - 4th Sep 21
The Most Actively Traded Companies on the Toronto Stock Exchange - 4th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Investors Flock To Gold as Global Banking Crisis Worsens

Commodities / Gold & Silver Jan 14, 2008 - 10:26 AM GMT

By: Adrian_Ash

Commodities THE SPOT GOLD MARKET surged into the London opening once again on Monday, starting the week at a new record high of $914 per ounce and hitting record highs against all other major currencies, too.


"The fresh flows of investment into commodities are gaining pace as news on the US economy continues to worsen," says Mitsui, the metals dealer, in a note today.

"Our projection for gold (for there is little other technical analysis to look at) is $975, but with Gold Market volatilities increasing, the possibility of a significant pullback is growing."

US stock futures pointed higher as the Wall Street opening drew near, but the S&P 500 index has now fallen for three weeks running to lose 4.6% from New Year's Eve – "the worst start since 1982," according to Bloomberg.

Citigroup Inc. is rumored to face fresh losses of $24 billion on its mortgage-bond investments, and a report from CNBC also forecasts 24,000 lay-offs when the world's largest bank reports fourth-quarter results on Tuesday.

Today's Financial Times says Merrill Lynch – due to report on Thursday, and widely expected to write-down a further $10-20 billion in mortgage-bond losses – is now looking to raise $4bn in capital funds, with the state-owned Kuwait Investment Authority set to take a "significant" stake.

"The weak Dollar, the simmering pot called Iran, crude oil at $100 per barrel (and likely to rise much higher this year), a deadbeat US presidency, a probable US recession, collapsed credit, diabolical consumer confidence...Little wonder investment money is flocking to gold," says Jessica Cross of the Virtual Metals consultancy at MiningMX.com today.

"But the increase in speculative positions in gold futures – now at a net long of 1,600 tonnes – means a correction, when it happens, could be devastating," she adds. "Some of the big investment banks are already privately advising clients to get ready to sell at a moment's notice."

The "net long" position of speculative traders at the Comex in New York grew by 3% in the week to last Tuesday, says the latest official data, hitting a record 205,404 contracts. On the other side of the trade, however, betting on US interest-rate futures is now unanimous that the Federal Reserve will cut 0.5% off the cost of borrowing Dollars when it meets on Jan. 30th.

This time last week the futures market priced a 50-basis points cut at 66%.

"We can find higher and higher Gold Price targets depending on how gloomy we get on the macro-economic mix and the policy settings that are likely to follow," says Sean Corrigan, chief investment strategist at Diapason Commodities Management in Lucerne , Switzerland .

"On the way up in this latest leg there was good support at $850. Several times we tried to dip back towards it, but gold was immediately bought back, and that's given us the impetus for this round.

"The general trend here is the one we like. You're buying commodities as much for inflation protection as for growth [and] precious metals are the obvious outlet for this. We've got safe haven worries as well, and everything is coming together.

That said, "there is a huge speculative long in this position," says Corrigan, "so you've got to worry about a sudden lurch down before the next move higher."

Asian stock markets fell yet again this morning, closing the day 1.9% lower in Tokyo and losing 1.5% in Hong Kong . Gold futures traded at Japan 's Tocom exchange rose 1.6% to breach ¥3,100 per gram for the first time in 24 years.

On the currency markets the Euro broke through $1.4900 for the first time since last month, when the single currency made life-time record highs just shy of $1.5000. But today's move failed to cap the surging Gold Price in Euros , however, which shot 1.5% higher from its overnight low to hit new highs above €613 per ounce.

For British investors wanting to Buy Gold today, the metal gained more than 1.6% as London opened to reach £465.50 per ounce – nearly £30 higher per ounce from this time last week.

In the commodity markets today crude oil held flat after the Qatari energy minister said the Opec oil cartel – which accounts for more than 40% of the world's daily supply – "cannot control market forces."

"They can't control the geopolitics," said Abdullah al-Attiyah to reporters in Doha . "They can't control the speculation."

Copper prices rose in Shanghai to a two-month high on news that China 's copper imports grew by 8.6% last month from Dec. '06. Zinc and aluminum prices slipped, while soybean futures traded in Dalian , China , jumped to new all-time highs.

The new gold futures contracts being traded at the Shanghai Futures Exchange gained 0.5% for the session to equal $938 per ounce for June delivery.

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 2008

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