06
Jan
2009

Gold Investments Market Update – Silver Up 17% in Month but Remains Very Oversold

Gold has fallen again today and is down some 1% but continues to consolidate between $830/oz and $890/oz. Gold should remain well bid given the degree of international macroeconomic and geopolitical risk challenging us as we enter the New Year. The Middle East tensions continue to escalate and oil is up another 2.5% again today to some $50 per barrel again. Silver has outperformed even gold in the last 30 days and is trading very well – up nearly 17% versus gold’s rise of 12%.

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05
Jan
2009

Gold Investments Market Update – Geopolitical Risk Escalates and Will Lead to Further Safe Haven Demand

Gold has commenced the New Year as it did in 2008 – up sharply in early trading before selling off somewhat. Gold surged (along with oil) on the open in Asia on geopolitical concerns with the Israeli military offensive against Gaza escalating. However, with oil giving up some of its earlier gains and the dollar stronger against most currencies so far this morning, gold has given up its earlier gains.

The reemergence of geopolitical concerns in the Middle East (and with Russia) is likely to see gold well bid in the mid $800s/oz.

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24
Dec
2008

Gold Investments Year-End Review – Outlook for 2009

Gold Outperformed Most Assets in 2008 – Gold Up 3.9% in USD; Up 5.3% in EUR and Up 34.4% in GBP.
Today’s London AM fix (23/12/08) was $844.01 (USD), £570.85 (GBP) and €603.72 (EUR). At the start of 2008 (January 2nd 2008), gold’s London AM Fix was at $840.75 (USD), £424.81 (GBP)  and €573.34 (EUR). Thus, in 2008 gold is up by 3.9% against the dollar, up 5.3% against the euro and up 34.4% against the pound. The London AM Fix is a widely followed benchmark for physical gold and silver prices and is reported in major newspapers and at many gold-related websites.

23-Dec-08

Last

1 Month

YTD

1 Year

5 Year

Gold $

845.15

5.77%

1.42%

4.16%

105.83%

Silver

10.80

12.07%

-26.85%

-24.60%

89.21%

Oil

39.82

-20.93%

-59.84%

-57.45%

24.63%

FTSE

4,283

13.27%

-33.66%

-33.43%

-3.55%

Nikkei

8,724

10.27%

-42.85%

-42.82%

-15.89%

S&P 500

872

8.95%

-40.64%

-41.28%

-20.25%

ISEQ

2,384

2.72%

-65.62%

-65.57%

-51.03%

EUR/USD

1.3990

11.15%

-4.08%

-2.71%

12.85%

© 2008 Goldassets.co.uk

This has led to a sharp outperformance of gold vis-à-vis every major equity indices and commodity in the word, not to mention most property markets (see Chart and Performance table). In March, gold fell from a record nominal high of just over $1,000/oz but it is important to remember that gold is only down some 15% from that record nominal high and this is after surging nearly 60% in the previous 7 months. In the seven months from the start of the credit crunch and the collapse of Bear Stearns, gold had surged by nearly 60% – from $640 in August 2007 to over $1,000 in March 2008.

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19
Dec
2008

Gold Investments Market Update – Silver to Continue to Outperform Other Assets in 2009

Gold fell yesterday on a bounce in the dollar and renewed weakness in the oil and commodity markets. While gold has clearly decoupled from oil and commodities in recent weeks, due to its safe haven currency credentials, oil and the commodities can still effect gold’s performance in the short term. As can weakness in stock markets. Gold trading on the COMEX in the US opening hours has been increasingly correlated with stock markets in recent weeks and months . This correlation with stock markets is however of a short term nature as can clearly be seen in gold’s outperformance of equity markets in recent months and years. The volatility in currency markets is huge and the dollar has rebounded strongly in the last 24 hours (from over 1.47 to back to 1.40 ) which is putting pressure on gold as is the weakness in stock markets. However, the stock market weakness and very uncertain outlook for 2009 will lead to further safe haven demand.

Silver to Continue to Outperform Gold and Other Assets in 2009

Silver has fallen sharply in recent months but will still outperform all major equity indices in 2008. This is quite an achievement especially given the fact that silver has surged in value in recent years and particularly in late 2007 and the start of the financial and economic crisis.

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18
Dec
2008

Gold Investments Market Update- Solvency of UK and US Plc Now Under Threat

Gold’s safe haven credentials have been reaffirmed in recent days as the dollar’s safe haven appeal is increasingly being questioned (see News and Commentary section of homepage). The scale and speed of the decline of the dollar (and to a lesser extent, sterling) in recent days is unprecedented.

The dollar has fallen against all major currencies but especially the euro.

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17
Dec
2008

Gold Investments Market Update – Dollars Are Free – Gold to Become More Expensive

The surprise move by the Fed to lower the Fed funds rate by more than 75 basis points to a record low and an unprecedented band between 0.25% and 0% led to sharp falls in the dollar (low of 1.4188 to the euro) and a spike in the gold price to over $859.40/oz.

The Federal Reserve has embraced ‘Helicopter Bernanke’s’ “inflate or die” massive reserve and money creation academic theories in an attempt to prevent deflation. Markets realise that this will lead to a lower dollar and higher gold prices in the medium and long term.

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16
Dec
2008

Fred Thompson explains the bailout (satire)

 

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16
Dec
2008

Gold Investments Market Update – Gold To Remain in Bull Market While Counter Party Risk is Elevated and Interest Rates Remain Low

Gold rose again yesterday and the dollar fell sharply in anticipation of the Federal Reserve further slashing interest rates to record lows of 0.5% today.

In a desperate bid to prevent a recession deepening, the Federal Reserve is prepared to slash interest rates to an all-time low near 0% today. With ZIRP (zero interest rate) policies, the US and global economy and monetary system is entering unchartered territory which is leading to continuing safe haven demand for gold.

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15
Dec
2008

Gold Investments Market Update – FT Reports that Counter Party Risk May Lead to Potential Squeeze in Gold Market by End of Year

Gold rallied sharply last week and was up nearly 9% despite continuing uncertainty and a very mixed performance in stock markets. The US dollar index fell some 4% on the week and it looks increasingly likely that the dollar may have topped out and may soon resume its bear market.

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12
Dec
2008

Gold Investments Market Update – PwC Finds ‘Gold is Serving Its Purpose as a Hedge of Wealth in Uncertain Times’

Gold rallied sharply yesterday, for the fourth day in a row, on sharply higher oil prices (some 10%) and a weaker dollar. Gold gave up some of its gains overnight in Asia as the dollar bounced after recent sharp losses in volatile trade.

Gold’s rally yesterday had nothing to do with an increase in risk appetite. If that was the case, why have stock markets internationally been falling sharply again in recent days and yesterday?

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