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 fell modestly yesterday while silver rallied as markets digested the unpalatable news of a potential global swine flu pandemic.
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.
The Financial Times published a relevant and interesting article by Nassim Nicholas Taleb, a veteran trader, a distinguished professor at New York University's Polytechnic Institute and the author of The Black Swan: The Impact of the Highly Improbable. 1. What is fragile should break early while it is still small. Nothing should ever become too big to fail. Evolution in economic life helps those with the maximum amount of hidden risks – and hence the most fragile – become the biggest.
Gold fell a further 2.7% yesterday (silver nearly 4.8%) as the animal spirits from the G20 communiqué and much vaunted IMF gold sales led to further selling and the shorts continued to press their advantage. Dollar strength and oil weakness also contributed to the sell off yesterday. Interestingly, gold has risen strongly overnight in Asia and in Europe this morning despite continued dollar strength and oil weakness.
Gold fell 2.85% (silver -3.9%) last week as risk appetite returned due to the G20 communiqué. The selloff has continued in Asia this morning and gold fell to a low of $873/oz prior to rebounding somewhat. The G20 agreement was long on rhetoric and lofty principles and short on concrete commitments and action.
Gold rose slightly yesterday as the dollar fell out the outset of the G20 Summit in London. In trading in London, gold is down some 1% this morning as risk appetite returns to markets with stocks surging internationally. Jewellery demand and demand from consumers in India and the Middle East has fallen and scrap supply from consumers has increased significantly. Jewellery demand and particularly scrap supply is what is patronizingly called the “dumb money”.
Gold rose 0.8% yesterday (silver -0.4%), as the dollar came under pressure ahead of the G20 gathering in London. It was the last day of the first quarter which saw gold rise 4.3% which is a second straight quarterly gain. In the quarter, gold was up some 10% in euro terms and some 6% in pound terms. Gold thus again outperformed most other asset classes (as per performance tables below). The Dow Jones Industrial Average ended the first quarter of 2009 at 7608.92, down 13% which was the worst first quarter in percentage terms since 1939.
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