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 Investors Ending 2008 in Profit

Commodities / Gold & Silver Dec 30, 2008 - 10:10 AM GMT

By: Adrian_Ash

Commodities

THE WHOLESALE PRICE OF PHYSICAL GOLD slipped in London on Tuesday, retreating 2% from yesterday's early 11-week high to trade at $871 an ounce.

World stock markets rose and crude oil fell in thin holiday trade. Bond prices pushed higher again, driving yields still further below inflation.


"By and large, the market is unwilling to trade gold from the short side," notes the latest Gold Futures analysis from Mitsui, the precious metals dealer, in London.

"While scrap selling across traditional hubs placed an obvious ceiling on gold scaling $900, this appears to have dissipated for now."

Indeed, "Gold is set to close the year as one of the very few assets posting a positive 2008 return," Mitsui goes on – "a very significant achievement [that] bodes well for the year ahead."

Looking to Gold in 2009 , "as the current deflation reality eventually abates and inflation looms large over the market," says Mitsui, "in such environments gold theoretically should flourish."

Overnight, however, the US Dollar leapt 4¢ against the European single currency, driving it back to $1.3950 and supporting the Gold Price in Euros above €615 an ounce.

That put gold more than 5% higher for French, German and Italian investors from the close of 2007.

Versus the British Pound, the price of Gold continued to hold north of £600 an ounce, more than 37% above its closing level last year.

London's FTSE100 index, in contrast, has dropped one-third of its capitalization. Interest paid to cash-in-the-bank now trails the rate of inflation by the worst margin since 1980.

"The Israel-Hamas tension [has] continued lending support to gold," said Shuji Sugata at Mitsubishi Corp. Futures & Securities in Tokyo to Bloomberg today.

Preparing the outlook for Gold in 2009 , "we may see some technical selling and year-end book squaring after the recent gain."

Tocom gold futures closed Tuesday – the last day of 2008 trading – some 16% lower from New Year's Day. The first annual loss in almost a decade came as the Japanese Yen leapt on the forex market, delivering its strongest performance since 1989.

Bruised by this same "risk aversion" – a flight to cash that saw domestic Japanese investors begin to unwind $6 trillion-worth of offshore investments – the Nikkei stock index ended the year more than 42% lower, its worst ever 12-month loss.

On the monetary front, meantime, the US government promised $5 billion to buy equity in GMAC, the struggling auto and mortgage finance company, in one of the last desperate acts of the Bush administration.

The White House also vowed late Monday to extend the tax-funded loans to General Motors by a further $1 billion.

"Technical momentum signals are still warning of further upside potential for the Dollar," reports Manqoba Madinane for Standard Bank in Johannesburg.

"This could see the Dollar endure volatile swings if [today's Consumer Confidence & Case-Shiller Home Price] data comes in worse than expected. This might then create a negative feedback loop, causing further drainage of tactical investment flows from precious metals today – further compromising upside potential."

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

© 2005-2022 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