Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
9.WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING MARKET - Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
Have US Bonds Bottomed? - 27th June 22
Gold Junior Miners: A Bearish Push Is Coming to Move Them Lower - 27th June 22
Stock Market Watching Out - 27th June 22
The NEXT BIG EMPIRE WILL BE..... CANZUK - 25th June 22
Who (or What) Is Really in Charge of Bitcoin's Price Swings? - 25th June 22
Crude Oil Price Forecast - Trend Breaks Downward – Rejecting The $120 Level - 25th June 22
Everyone and their Grandma is Expecting a Big Stocks Bear Market Rally - 23rd June 22
The Fed’s Hawkish Bite Left Its Mark on the S&P 500 Stocks - 23rd June 22
No Dodging the Stock Market Bullet - 23rd June 22
How To Set Up A Business To Better Manage In The Free Market - 23rd June 22
Why Are Precious Metals Considered A Good Investment? Find Out Here - 23rd June 22
UK House Prices and the Inflation Mega-trend - 22nd June 22
Sportsbook Betting Reviews: How to Choose a Sportsbook- 22nd June 22
Looking to buy Cannabis Stocks? - 22nd June 22
UK House Prices Momentum Forecast - 21st June 22
The Fed is Incompetent - Beware the Dancing Market Puppet - 21st June 22
US Economy Headed for a Hard Landing - 21st June 22
How to Invest in EU - New Opportunities Uncovered - 21st June 22
How To Protect Your Assets During Inflation - 21st June 22
AI Tech Stocks Current State, Is AMAZON a Dying Tech Giant? - 20th June 22
Gold/Gold miners fundamental checkup - 20th June 22
Personal Finance Tips: How To Get Out Of A Tough Financial Situation - 20th June 22
UK House Prices Relative to GDP Growth - 19th June 22
Will Global Markets Be Pushed Deeper Into Crisis Event By The US Fed? - 19th June 22
Useful Things You Need To Know About Tweezer Top Candlestick Pattern - 19th June 22
UK House Prices Real Terms Sustainable Trend - 17th June 22
Why I’m buying the “new” value stocks… - 17th June 22
Optimize Benefits from R&D in Software Product Development with an R&D Tax Credit Software - 17th June 22
Want To Save On Your Business Energy? Here Are Some Helpful Tips - 17th June 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Price Slips But Up 13 Days Running on "Stop-Loss Fiesta"

Commodities / Gold and Silver 2013 Jul 24, 2013 - 01:41 PM GMT

By: Adrian_Ash

Commodities

The PRICE OF GOLD fell $10 per ounce from a new 5-week high in London on Wednesday morning, but stood higher for the 13th session running amid what one trading desk called "a stop-loss fiesta".

"There [is] still a lot of short positioning to unwind," says a note from finance and refining group MKS in Geneva, "with very little seen in terms of any pullbacks."



Stop-losses are orders set in advance to close a position if prices hit a certain level.

The number of bearish bets against gold held by speculative traders in US futures contracts last week dropped 10% according to latest data from US regulator the CFTC.

Trading volume in gold futures has fallen this month from the two-year records of April-June.

Options on gold futures, in contrast, have seen what exchange operator the CME Group yesterday called "huge" volume in August contracts over the last week, nearly one-third higher from year-ago levels.

All told, open interest in gold options has jumped to record levels. The August options contract expires Friday.

"While the breakout in gold is bullish," says the latest technical analysis from London market-maker Scotia Mocatta, "given the bearishness of the trend that has been in full force since 2012, we would prefer to see a weekly close higher.

"However, short-term signals are encouraging."

Asian and European stock markets meantime edged higher, while commodities were flat.

Silver prices meantime edged back with gold, cutting their gains for the week-to-date to 3.4%.

Gold investment prices stood 3.0% higher in Dollar terms by Wednesday lunchtime in London.

Projecting a 1-3 month target of $1150 per ounce, "Gold breached the upper part of the previous range at 1303 and reached the one-month channel upper limit at 1341/43," says technical analysis from Societe Generale.

"A consolidation remains overdue."

The US Dollar meantime fell to a 1-month low vs. the Euro after stronger-than-expected PMI data showed Eurozone manufacturing activity expanding last month for the first time since January 2012.

That pulled gold investment prices for Euro buyers back down to €1013 per ounce.

UK investors meantime saw gold near £877 per ounce, just above the level where June's crash began in Sterling terms.

"A hold above the 50-day moving average of $1331 an ounce...may have provided some support for bullion prices," says London bullion market-maker HSBC's analyst James Steel.

"We suspect," agrees broker INTL FCStone's analyst Edward Meir, "that gold will likely find an element of support over the next several weeks, at least until investors start to focus on the key Federal Reserve meeting slated for September."

The US central bank announces summer policy next Wednesday, but bond investment analysts expect no change until September – when the majority now forecast a cut from $85 billion to $65bn in the Federal Reserve's monthly quantitative easing purchases of Treasury and mortgage bonds using newly-created money.

US Treasury bonds slipped overnight, nudging 10-year interest rates up to 2.56% – a 1-week high more than two-fifths above the start of 2013.

Gold investment positions in exchange-traded trust funds fell again yesterday, taking global holdings in gold ETFs to new 3-year lows.

Meantime in India – the world's No.1 gold consumer – the Reserve Bank's announcement forcing gold importers to re-export 20% of any shipments is "the most dangerous circular [for the jewelry business] we have witnessed in the last 20 years," says Bachhraj Bamalwa, director of the All India Gems & Jewellery Trade Federation, speaking to Reuters.

India began relaxing tight gold import restrictions in the early 1990s, making legal what was already the world's heaviest flows of physical gold.

"It's going to be chaos," agrees a Bangalore jewelry producer, pointing to the post-summer surge in Indian gold demand due when the festival and wedding season recommences.

By Adrian Ash
BullionVault.com

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

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich, Switzerland for just 0.5% commission.

(c) BullionVault 2013

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