Increasing fears of a global recession and possibly even a depression, saw gold rise another 3.2% (silver was up 4.5%) on increasing international safe haven demand. Markets participants are realizing that while sharp deflation is the challenge today, in a few months we may be confronted with an even greater challenge in the form of stagflation and possibly even mild hyperinflation. The World Gold Council have reported that demand for gold rose 29% in the last year.
After another strong week last week (both gold and silver were up some 3%) despite falling stock markets, gold continues its outperformance of other asset classes due to safe haven demand.
Gold rose again yesterday, briefly rising above $950/oz and was up 0.6% on the day. Determined selling on the open in Asia saw gold fall and profit taking has seen gold fall in Asia and in early trading in London. This is to be expected as gold had risen by more than 15% in less than a month.
Gold surged a further 3.3% yesterday to $942.45 (as did silver) as worries about the US and global financial system and economy continue to grow and governments print money on an unprecedented scale to combat the economic crisis.
Gold surged yesterday (up 2.4% and silver was up 2.3%) as stock markets fell sharply with investors increasingly frustrated and nervous with the lack of details about the US government's latest $2,000 billion bank bailout plan. There is resistance at $930/oz and further consolidation may be necessary at these levels prior to closing above this level but gold is looking very strong both technically and fundamentally.
Profit taking saw gold fall yesterday but continuing very robust demand for physical bullion and gold ETF’s for safe haven purposes means that this is likely another period of consolidation. There is a dawning realization that we are in the early stages of a severe global recession and possibly even a global depression. In this uncertain climate for the global financial system and the global economy itself, risk aversion is set to remain elevated and thus demand for physical gold bullion will also remain elevated.
Gold fell some 1.5% last week as investors took profits with gold having been up some 10% in the previous three 3 weeks. But the short and medium term prospects look sound in the light of strong fundamentals and some important indicators – silver was up by another 4.2% last week and the gold mining indices were also higher (XAU +4.6% and HUI +2.3%). The mining indices are often a leading indicator and silver usually underperforms gold in the early stages of rallies and outperforms in the latter.
Gold remains firm as there is increasing nervousness about the global economy and indeed nervousness about the global monetary system and this is leading to continuing strong investment demand. Gold remains at or near record highs in nearly all major currencies ($914.00 £622.11 €713.06) and looks set to regain its nominal record high of $1,030/oz in the coming weeks. UBS joined Goldman Sachs and Merrill Lynch in drastically increasing their gold price forecasts yesterday.
With stock and bond markets under renewed pressure, gold remains very well bid and is up some 0.6% in early trading in Europe. Goldman Sachs have increased their forecast for gold from the previously very low $700/oz to over $1,000/oz in the next three months due to “rising investor demand for safe haven assets”.
Gold has recovered somewhat from the 1.5% loss yesterday to close at $890.60 (as did silver which was down 0.6%) and rose 1% in after hours and is trading at just below $900/oz in late morning trading in Europe. While stock markets have had a relief rally on a return of risk appetite, the US bond market was again under pressure as was the dollar.
Gold continues to consolidate near recent highs despite profit taking falls.
Gold rose by just over 1% yesterday to over $900/oz as renewed risk aversion saw stock and bond markets come under pressure. Gold subsequently traded sideways in Asia prior to another strong rally at 0800 GMT when gold surged from $901/oz to $926/oz in the hour. It has since given up some of those gains but remains above $920/oz. Demand remains very high internationally for ETFs, gold certificates and bullion coins and bars.
Gold traded sideways in Asia overnight but has fallen in early European trading. Increasing risk appetite has seen equities rally again and this is likely leading to profit taking in the gold market. With gold having increased by some $100, more than 12% in less than 10 trading days and some will be taking profits. The market may look for guidance from the FOMC rate decision and OTC option expiry later today. The outcome of the FOMC policy meeting takes centre stage today and the committee is widely expected to leave rates unchanged at 0-0.25%.
After last week's strong gains, gold continued to surge in all currencies yesterday reaching new record highs in euro and pounds sterling. Prices remained firm in early trading in Asia prior to giving up some of yesterday's gains. The convincing technical close well above previous resistance should see gold (and silver) soon embark on the next leg up in their secular bull markets. Resistance for gold was at $880/oz and this may well become support.
Gold has consolidated on the strong gains seen last week of 6.43% rise in the week (silver +6.6%). Gold fell initially in Asia to $890/oz before rising sharply in early trading in Europe to over $907/oz. Much of the technical damage done in recent weeks has been overcome and gold is again looking bullish from a technical and fundamental viewpoint. But it needs a daily or better a weekly close above the recent October high of $925/oz if it is to again surpass last year's record high of over $1,000/oz.
Gold fell slightly yesterday consolidating on the sharp gains of the inauguration day. Gold rose some $10.00 to $865.00 by early trade in London before falling in Europe and early trading in the US, but it then rallied back higher in afternoon trade and ended with a loss of just 0.40%. Silver traded similarly but as has been the case recently, outperformed gold by rising over 1%. Markets await US data today including Building Permits for December, Housing Starts and Initial Jobless Claims which are not expected to cheer the markets and should lead to further safe haven demand for gold.
Gold rose strongly on the inauguration of the 44th President, President Obama, yesterday - rising some 2% in dollar terms. It subsequently gave up some of those gains in Asia prior to rallying again in early European trading to over $860/oz. And gold’s strength came despite a very strong dollar yesterday. Importantly, this meant that gold surged in euro and to new record highs in British pounds at £624.85/oz This morning’s London AM fix (21/01/09) was $860.50 (USD), £624.59 (GBP) and €666.02 (EUR).
It is a historic day for the world with the inauguration of the 44th President of the United States of America. Gold has rallied by more than 2% despite continuing dollar strength and oil having collapsed 7% to just over $34 per barrel (Light Sweet Crude Oil Future - Combined - FEB09 : -7.6%) . While the dollar is up on hopes that President Obama can turn around the ailing US and indeed the global economy, stock markets internationally are under pressure again today with increasing concerns regarding the international banking and financial system.
Gold rallied on the open in Asia to over $845/oz overnight before falling on a stronger dollar, then rising again in early morning trade in Europe before falling again to $838/oz, some $3/oz below its close on Friday. Gold fell 1.5% last week but surged 4% on Friday alone (silver was down 0.5% for the week but surged over 7% on Friday). As has been the pattern in recent years, stock markets fell by far more than gold and silver last week with the S&P 500 down 4.5%. The FTSE 100 was down 6.8pc - its worst week since November.
Gold is marginally higher today but has fallen to one month lows as markets await the ECB interest rate decision. The ECB is expected to cut by 0.5% today and that has put the euro and gold under pressure as the dollar has strengthened in recent days. However, the deteriorating outlook for the US economy as seen in the very poor retail numbers yesterday (sixth monthly fall) will likely see the dollar come under renewed pressure in the medium term.
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