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.
Essay by Meghan Brown “If the story of the past quarter of a century has a one-line plot summary, it is the rediscovery of market capitalism.” – Alan Greenspan, The Age of Turbulence, p.14 For the past thirty years, neo-liberal economic thinking has been the dominant orthodoxy governing policy and shaping development. Born from Adam Smith and his ideas of the ‘invisible hand’, this theory prevails in many well-connected and highly influential institutions such as the International Monetary Fund (IMF), the World Bank (WB), and the US Treasury, together known as the ‘Washington Consensus’. This essay will explore the theories behind neo-liberalism, which contend that unfettered markets provide the best arrangement for the allocation of resources and to which prominent thinkers such as Jagdish Bhagwati, Thomas Friedman and Martin Wolf subscribe.
Gold fell yesterday (both gold and silver were down some 1%) in volatile trade which saw some very determined selling each time gold looked set to break out above $930/oz. There appears to be support at $890/oz to $910/oz and resistance between $930/oz and $960/oz. As usual gold's safe haven properties were seen yesterday as most international equity indices were down some 3% to 5% while gold fell only marginally.
Gold and silver succumbed to profit taking (gold down 3.2% and silver down 2.5%) last week as risk appetite returned to markets with the tentative recovery in equity markets continuing. Gold’s performance was lackluster, despite increasingly bullish news with regard to growing acceptance that the international monetary system must be reformed and the strong probability that gold will again play a more significant part in the international monetary system.
Adrian Douglas of Market Force Analysis writes that in his experience, most ordinaly people have difficulty understanding why gold is the investment opportunity of a life time. Blaming the messenger, he explains it in simple terms, making a distinction between consumables and collectables:
Gold and silver rose ($939.80 up $4.40 - Silver $13.65 up 18 cents) yesterday on deepening concerns about the dollar and fears that its reserve currency status is threatened. Next week could see sharp moves in financial markets as the dollar’s dominance in the international monetary system is set to be questioned at the G20 Summit (Thursday, April 2nd). The US creditors in China and Russia are proposing creating a new supra-national reserve currency, thereby lessening dependence on the dollar.
Gold and silver fell yesterday ($923.30 down $29.70; Silver $13.34 down 52 cents) on profit taking and renewed risk appetite which saw equities rally internationally (prior to a late sell off in the US) and the dollar rally after its recent sharp falls. Macroeconomic, systemic and monetary risk has seen the dollar, the euro and more particularly sterling fall versus gold in recent months.
It was a historic week, with the Federal Reserve opting for the "nuclear option" of money creation on a trillion dollar scale. Gold and silver rose 2.7% and 4.5% respectively.
Gold surged 8% yesterday (as is the norm, the far smaller market that is silver surged by even more and was up by 13.3%) as the shock Federal Reserve announcement led to concerns regarding the dollar and the inflationary implications of massive money printing and debasement of the currency. The dollar has fallen sharply against all currencies and particularly against the finite commodity and currency of gold which cannot be debased.
MDC activist Sam Chakaipa returns to his village in rural Zimbabwe to find his friends and neighbours starving to death, reduced to panning gold powder from the rivers to exchange for food at an exorbitant rate. The Guardian via Youtube:
Gold fell in US trading hours yesterday for no apparent reason; but on the Fed announcement, gold surged by nearly 7% in afterhours access trade. Gold leapt from its session low of $884.10/oz to a high of $946.20/oz, a jump of nearly 7 per cent and silver also surged some 7%.