I have just completed an analysis of the performance of the spot price of gold vs. Berkshire Hathaway. I think you will find the results are a little suprising.
Gold and silver rose yesterday (the first day in three) after the worse than expected US GDP report saw the dollar fall in value. Gold fell after the Federal Reserve released its optimistic note but recovered almost immediately.
Gold subsequently traded sideways in Asia and early trading in Europe prior to another bout of furious selling just after 1000 GMT this morning which again saw gold fall a very sharp $10 in a matter of minutes despite the lack of any market or economic news of great significance.
Gold fell marginally for a second day yesterday as it continues to consolidate after last week’s 5% gain. Gold’s trading was erratic yesterday with unusually large sell orders leading to sharp falls in the price in seconds prior to mild rebounds. Such sharp and speedy declines are very unusual and would suggest a large player wanted gold prices lower in the futures market.
Gold and silver fell yesterday (1% and nearly 4% respectively) as strength in the dollar and increasing risk appetite, as seen in rising equity indices, saw the precious metals come under pressure.
Demand remains strong despite the slight fall in the holdings of the SPDR Gold Trust (world’s largest gold ETF), whose holdings fell 0.7% from the previous day (down 0.7 percent or 8.25 tonnes to 1,119.43 tonnes as of April 16). But demand in India has resumed for the Hindu festival of Akshaya Tritya (considered an auspicious time to buy gold) and while not spectacular is robust nevertheless.
Gold and silver rose marginally in US trading yesterday and have largely traded sideways in Asian and European trading. Gold appears to be consolidating in the $865/oz to $900/oz region and needs a higher weekly close (above $883/oz) and then a close above $900/oz to look good from a technical perspective.
While gold fell marginally yesterday on the COMEX, it was up some 1% on the day overall with small gains in Asia and Europe.
Obama’s message of hope for the US economy (while warning that the US economy was “by no means out of the woods just yet”) has been met with indifference in equity markets which are down in Europe this morning.
Gold and silver rose yesterday as stocks came under pressure with increasing fears regarding General Motors possible bankruptcy.
Ostensibly positive news from the financials (Wells Fargo and Goldman Sachs) has lifted markets in recent days but there are concerns that the positive results may have had more to do with government largesse (with tax payers’ money) and innovative accounting rather than any meaningful return to profitability.
Gold and silver rose marginally for a second day yesterday as bargain hunters and value buyers continued to accumulate.
The dollar was up marginally as was oil and stock markets eked out marginal gains.
News that international gold scrap supply (mostly consumers selling jewellery) has for the first time in 30 years surpassed international jewellery demand. Looked at singularly, this is ostensibly bearish. But it is bullish from a contrarian perspective as it shows that there is little or no “gold mania”.
Gold rose 1.2% yesterday from oversold levels (silver +0.9%) despite stock markets falling, the dollar strengthening and oil falling for a second day. The rally has continued in Asian and early European trading as equities are again under pressure and gold is again receiving a safe haven bid.
The shadow banking system’s huge and growing toxic debt (IMF revised upwards their estimates from $2 trillion to over $4 trillion) looks set to impede any progress in fixing the ruptured international financial system.