Best of the Week
Most Popular
1.China Crash, Greece Collapse, Harbingers of Stock Market Apocalypse Forecast 2015? - Nadeem_Walayat
2.Gold Price Awaiting Outcome of Greece Crisis - Clive_Maund
3.Gold Price Peculiar 6 Month Cycles - Rambus_Chartology
4.Gold Price Just a Little Bit More - Bob_Loukas
5.8 Unprecedented Extremes Indicate a Stock Market Bubble in Trouble - EWI
6.Gold And Silver – Without Either, You Will Be Greeced - Michael_Noonan
7.Lies, Damned Lies and Statistics - James_Quinn
8.China Crash, Greece Crisis Harbingers of Stocks Bear Market? Video - Nadeem_Walayat
9.Gold and Silver Record Shorting - Zeal_LLC
10.Markets Big Deflationary Downwave Quick Reference Guide... - Clive_Maund
Last 5 days
Gold Mining Stocks to Weather the Storm - 28th July 15
Stock Market Bulls Beware! - 28th July 15
Will Chinese Stock Market Crash Affect the US? - 27th July 15
Crude Oil Price Under $48! - 27th July 15
Are We Seeing a Trend Reversal with U.S. Interest Rates? - 27th July 15
How to Know When the Gold Bear Market is Over - 27th July 15
Gold Bear Market Phase III - 27th July 15
Silver Bull Hammer Buy Signal - 27th July 15
Gold Cracks Support and Plunges to New Lows - How Low Will Price Go? - 27th July 15
Commodity Markets Breakdown Of 2015 Is Now A Fact - 26th July 15
Gold Price at a Five-Year Low: Here’s What to Do - 26th July 15
Stock Market Primary III Inflection Point - 26th July 15
Central Banks and Our Dysfunctional Gold Markets - 25th July 15
Gold And Silver - The US Dollar Does Not Exist, Part II - 25th July 15
How Wall Street Put Apple Stock in Animal House - 25th July 15
How to Trade Markets Using the Stochastic Oscillator - Video - 24th July 15
A Bond Market Crisis Is Coming... Here's What to Do - 24th July 15
Why There's Resistance to the Iran Nuclear Deal - 24th July 15
Absurd Gold Stock Levels - 24th July 15
Gold Mining Stocks Nearing Rebound - 24th July 15
Misperceptions Create Significant Bond Market Value - 24th July 15
Commodities Distressed Investing - 24th July 15
OPEC Shorts Are Driving Down the Crude Oil Price - 24th July 15
USD Index Rebounds - 24th July 15
If You’re Worried About a Tech Bubble, You’re Focusing on the Wrong Thing - 24th July 15
Gold Stocks Bear Market Bottom Buying Opportunity? - Video
The Stealth War on the United States - 23rd July 15
Commodity Prices, Gold and Silver Stocks Next Leg Down - 23rd July 15
The ‘Real’ Reason the Fed Wants to Raise Interest Rates - 23rd July 15
Crude Oil Price Slump is a Once in a Decade Opportunity to Make Money, Guaranteed - 23rd July 15
Gold Price Hits a 5-Year Low: How to Time the Next MAJOR Bottom - 22nd July 15
Silver and the Deflation Thesis - 22nd July 15
Gold Price Crash - Trend Forecast 2015, Gold Stocks Buying Opportunity? - 22nd July 15
The Three Reasons Behind Iran’s Resistance to the Nuclear Deal - 22nd July 15
Winning the Hunger Games - How to Choose Successful Agriculture Investments - 22nd July 15
Are Free Markets The Solution? - 22nd July 15
Gold Hammered “Unprecedented Attack” - 21st July 15
The Turkish Enigma - 21st July 15
Gold and Silver: The Final Capitulation Commences - 21st July 15
Greater Israel Setback from Iranian Nuclear Agreement - 21st July 15
U.S. Housing Market: Is the Roof About to Cave In (Again)? - 21st July 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stock Market Bubble in Trouble

Gold and Silver Slide Together on Weak US CPI Inflation Data

Commodities / Gold and Silver 2010 Jul 16, 2010 - 09:43 AM GMT

By: Adrian_Ash

Commodities

THE PRICE OF GOLD fell hard at the start of New York trading on Friday, dropping back to this week's early lows for Dollar buyers – and hitting the lowest price since early May for Euro, Sterling and Aussie buyers – while stock markets sank on weak US data.

Commodity prices slipped, with silver also falling toward Tuesday's low of $17.80 an ounce.


The Dow Jones index dropped 1.0% at the opening.

"With [Thurs] afternoon's US Dollar weakness," say bullion bank Scotia Mocatta's analysts in a note, "gold bulls would have expected a decent move up to the $1225 technical pivot.

"On the bright side for gold, this [was] the third consecutive close above $1200."

Gold prices today slid to $1190 an ounce, while the US Dollar rallied against the British Pound but slipped to a near 10-week low vs. the Euro and sank to fresh 2010 lows vs. the Japanese Yen at ¥86.50.

Japanese stocks earlier closed the day sharply lower as the Yen rose, heading into the long Sea Day weekend some 2.9% down.

Tokyo gold futures also fell, slipping 0.5% to ¥3,397 per gram.

Physical Gold Trading in Asia was "very quiet" today according to one Hong Kong dealer, but "Investors don't know what to do after selling gold," says Ronald Leung, head of Lee Cheong Gold Dealers, speaking to Reuters.

"They can't really put the money into other markets. So they are still holding certain amounts of gold in their portfolios."

Noting the sharp drop in Euro gold prices that actually began on July 1st, "Investors' trust in the Euro currency is back," reckons Bayram Dincer, analyst at the Liechtenstein royal family's LGT Capital Management.

"Previous gold safe-haven buyers, mostly Europeans due to Euro fears, are reconsidering their gold investment as prices in Euro terms are declining."

The gold price in Euros has declined in every summer since the single currency was launched a decade ago, BullionVault analysis shows, rising to hit new highs for the year between Oct. and Dec. in 2001, 2005, 2007, 2008 and 2009.

"The unwinding of the Euro gold trade" – a position adopted by an increasing number of non-EU institutions and funds as the price gained 22% in the first half of 2010 – "effectively means buying-Euro and selling-gold," says Leon Westgate for Standard Bank today.

"The weakness [is] spilling over into the rest of the precious metals complex and explains why a weaker Dollar has had not impact on prices."

Following Wednesday's "hardly dazzling" auction of Greek government debt, as The Economist puts it, Chinese premier Wen Jiabao said Friday that Beijing will continue to buy Eurozone financial assets, a promise described as "an important signal" by his guest, German chancellor Angela Merkel.

Returning this week to the bond market for the first time since the EU and International Monetary Fund agreed a €110bn rescue facility, Athens raised €1.6bn in six-month bills, paying a yield of 4.65%.

That compares with 6-month German Bund yields of 0.47%.

Portugal yesterday raised €1.7bn in a mix of 2- and 9-year debt, paying more than 2.4 and 2.7 percentage points respectively above comparable German debt.

Spain meantime sold €3bn in 15-year bonds, paying a yield of 5.12%. Comparable Bunds pay 2.93%. Spain's previous 15-year auction in late April required a yield of just 4.43%.

"Appetite for Spanish paper is alive," says one fixed-income strategist, quoted by Bloomberg.

Ahead of next Friday's "stress test" results for 91 European banks, meantime "I get the feeling that what will come out will be rather reassuring," said IMF chief Dominique Strauss-Kahn on French TV earlier.

By Adrian Ash
BullionVault.com

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
Formerly 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 2010

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.


© 2005-2015 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

Biggest Debt Bomb in History