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 Volatile Monday Trading

Commodities / Gold & Silver Apr 21, 2008 - 09:39 AM GMT

By: Mark_OByrne

Commodities In volatile and choppy indeterminate trade in Asia and Europe gold has traded in tight range between $915 and $923. The London AM Gold Fix at 1030 GMT this morning was at $915.75, £461.64 and €577.40 (from $942.25, £472.19 and €592.31 Friday).


After a very strong week gold was taken down significantly on Friday, giving up the gains seen Monday to Thursday. Gold was down 1.28% last week while silver was up 0.68%. The lower weekly close in gold was bearish from a technical point of view but the fact that silver and the gold mining indexes were stronger and had higher weekly closes (HUI up 3.75% and XAU up 2.9%) suggests that gold's weakness may again prove temporary.

With oil and the dollar remaining near record highs and record lows respectively and with physical demand internationally and particularly in Asia and China remaining strong (see below), gold is unlikely to fall below $900 per ounce. Indeed resistance seen at last week's highs of $950 will likely again be challenged sooner than most analysts anticipate.

Review of Last Week

Risk appetite increased in the mistaken notion that the worst of the global financial and economic crisis has passed. Stock markets and the dollar were up strongly on Friday resulting in strongly weekly gains in stock markets (Dow +4.25%; Nasdaq +4.92% and S&P +4.31) and a marginal weekly advance in the dollar ( US Dollar Index +0.28%). The biggest movements came in the energy (Oil +5.95%; g + May Natural Gas surged 7.5% (up 42% y-t-d) and May Gasoline jumped 4.2% to a new record (up 21% y-t-d) ) and bond markets (10 Year US Bond + 7.84% to 3.743%) and the Long-bond yields gained 20 bps to 4.50%.

Perhaps the bond vigilantes have awoken from their long slumber and realizing that with food and energy prices surging inflation is a real threat to low yielding bonds. Any retreat from the bond market by the bond market vigilantes and by the U.S. huge creditors could see a return to normality in the bond markets and higher interest rates. It is hard to see how an already struggling US housing market and economy could cope with higher rates but unfortunately they seem inevitable.
21-Apr-08 Last 1 Month YTD 1 Year 5 Year
Gold $     
919.40
0.03%
10.33%
32.97%
175.68%
Silver      
17.83
3.84%
20.71%
28.27%
293.59%
Oil     
117.05
14.93%
18.03%
82.57%
279.17%
FTSE      
6,041
9.92%
-6.12%
-6.87%
55.32%
Nikkei     
13,697
9.72%
-10.52%
-21.52%
71.87%
S&P 500      
1,390
4.57%
-5.31%
-6.33%
55.86%
ISEQ      
6,217
0.94%
-10.34%
-35.93%
#N/A
EUR/USD     
1.5901
3.04%
9.02%
17.01%
46.47%
© 2008 GoldandSilverInvestments.com


Data this Week

Key U.S. data for release this week focus on the housing market, with existing and new home sales for March scheduled. Other US data of note include durable goods for March and the final Michigan consumer sentiment report for April and these will set the tone for markets.

Market Intervention to Support Dollar
While the dollar index was up marginally for the week, the dollar had a mixed performance versus various currencies. The dollar index rallied 0.3%, ending the week at 72.01.  For the week on the upside, the Canadian dollar increased 1.5%, the South African rand 1.2%, the Brazilian real 1.1%, the British pound 1.0%, and the Australian dollar 0.8%. On the downside, the Japanese yen declined 2.5%, the Swiss franc 1.9%, the South Korean won 1.7%, and the Norwegian krone 0.5%.

Friday's sharp movements in the currency and commodity markets were unusual and there may have been official intervention in order to prop up the dollar. There was no ostensible reason for the sharp increase in the value of the dollar versus the euro and gold's sharp sell off on Friday and it would be naïve to completely discount the possibility of official intervention in these markets to support the dollar. The G7 in their recent communiqué hinted at intervention, as has Treasury Secretary Henry Paulson.

Paulson, ex CEO of Goldman Sachs, recently  said that the U.S. administration has a "strong dollar" policy and declined to speculate on potential intervention in support of the falling greenback.  Asked about possible U.S. intervention in the foreign-exchange markets, where the dollar has depreciated rapidly amid a credit squeeze that is roiling financial markets, Paulson said: "I'm not going to speculate on hypotheticals and intervention."

Paulson's comments came after he attended a meeting with President George W. Bush and the president's Working Group on Financial Markets (also known as the Plunge Protection Team (PPT) ) at the White House. The meeting of the working group also includes the chairmen of the Federal Reserve, the Securities and Exchange Commission, and the Commodity Futures Trading Commission. The President's Working Group on Financial Markets in the US was formed in 1988 to enhance “the integrity, efficiency, orderliness, and competitiveness” of US financial markets and to maintain “investor confidence”.

Chinese Gold Demand Increasing Significantly
Figures from the World Gold Council showed sales of gold jewellery in China hit a record high of 302.2 tonnes in 2007, up 34 percent on the previous year. China has now overtaken the United States to become the world's second largest buyer of gold jewellery after India.

But behind the remarkable growth lies a deep Chinese traditional appreciation of the precious metal as a hedge against social and economic risks.

"I'm more confident in gold -- we've been buying it for so many years in the past anyway," said 78-year-old Wu Peifen, who was selecting a wedding gift for her grandson at Beijing's Wangfujing Department Store.

High inflation and a 41-percent slump in the domestic stock market this year have added further momentum to China's drive to buy gold.

http://www.research.gold.org/assets/image/research/img/charts/dailyshort_1.gif

Importantly, Chinese consumers are not deterred by rising prices, experts said. Rather, they increasingly view gold as not only a means to protect wealth but also as an efficient part of their investment portfolio. "In fact, higher gold prices helped to stimulate investment purchases of the metal... as consumers were attracted by the strong returns generated by the metal," the World Gold Council said in a recent report about the China market.

It said investment demand for gold at the retail level amounted to 23.9 tonnes in 2007, a rise of 60 percent compared with 2006.

Support and Resistance
Support for gold is at $910 and $905 and strong support is at $880. Resistance is now last week's high at $950.


Silver

Silver is trading at $17.85/17.90 at 1215 GMT.

PGMs

Platinum is trading at $2060/2070 (1215 GMT).
Palladium is trading at $455/460per ounce (1215  GMT). 

By Mark O'Byrne, Executive Director

Gold Investments
63 Fitzwilliam Square
Dublin 2
Ireland
Ph +353 1 6325010
Fax  +353 1 6619664
Email info@gold.ie
Web www.gold.ie
Gold Investments
Tower 42, Level 7
25 Old Broad Street
London
EC2N 1HN
United Kingdom
Ph +44 (0) 207 0604653
Fax +44 (0) 207 8770708
Email info@www.goldassets.co.uk
Web www.goldassets.co.uk

Gold and Silver Investments Ltd. have been awarded the MoneyMate and Investor Magazine Financial Analyst of 2006.

Mission Statement
Gold and Silver Investments Limited hope to inform our clientele of important financial and economic developments and thus help our clientele and prospective clientele understand our rapidly changing global economy and the implications for their livelihoods and wealth.
We focus on the medium and long term global macroeconomic trends and how they pertain to the precious metal markets and our clienteles savings, investments and livelihoods. We emphasise prudence, safety and security as they are of paramount importance in the preservation of wealth.

Financial Regulation: Gold & Silver Investments Limited trading as Gold Investments is regulated by the Financial Regulator as a multi-agency intermediary. Our Financial Regulator Reference Number is 39656. Gold Investments is registered in the Companies Registration Office under Company number 377252 . Registered for VAT under number 6397252A . Codes of Conduct are imposed by the Financial Regulator and can be accessed at www.financialregulator.ie or from the Financial Regulator at PO Box 9138, College Green, Dublin 2, Ireland. Property, Commodities and Precious Metals are not regulated by the Financial Regulator

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. Past experience is not necessarily a guide to future performance.

All the opinions expressed herein are solely those of Gold & Silver Investments Limited and not those of the Perth Mint. They do not reflect the views of the Perth Mint and the Perth Mint accepts no legal liability or responsibility for any claims made or opinions expressed herein.

Mark O'Byrne Archive

© 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