In a very interesting video about the gold market today, Stephen Flood of Gold and Silver Investments is interviewed by Javier Blas of the FT .
Gold has rallied 2.5% this morning after falling some 8% last week as the "dash for cash" and the deleveraging of the international financial system gathered pace. In the process, gold gave up most of the gains of the last 5 weeks in just one week. Gold was trading at some $740/oz on September 11th and subsequently surged to over $924/oz as Lehman Brothers collapsed and the global financial crisis deepened. Gold is wrongly being treated as just another commodity akin to pork bellies or lead.
It's only Thursday and the Treasury has gone to the credit markets for $194 Billion so far this week for short term paper alone. Let's say they only borrow another $6 Billion tomorrow and end up at 200 Billion. Let's do the math. 200 Billion times 52 weeks is ..........$10 Trillion 400 Billion Dollars. This coincidentally equals the amount of the current national debt.
Gold fell some 4% yesterday with forced selling being seen as hedge funds continue to deleverage and pension funds and other passive investors sell the various commodity indices.
Gold has remained resilient despite stock markets collapsing again internationally. Asian stock markets have fallen sharply with the Nikkei collapsing by more than 11%.
Gold continues to consolidate after its 3% rise last week. Given the scale of money creation and digital money printing taking place in the US and internationally, gold looks set to surge in the coming weeks as physical demand is unprecedented and supply remains lacklustre at best. While the gold price has not been as strong in terms of US dollars in recent weeks as some have expected, it is important to remember that the dollar has been the strongest currency in the world in recent weeks.
Government bailouts of the financial system will destroy the dollar, euro and sterling because of hyperinflation, Martin Hennecke, senior manager of private clients at Tyche told CNBC. But Todd Everts, president & CEO of Wall Street Global, disagreed. "The privatization of the banks is the first step down the road to hyperinflation," Hennecke said Monday.
Gold experienced sharp falls on Friday but was still up by more than 3% on the week.
While gold has again surged on safe haven buying overnight (and is up since 20% since the financial and economic crisis deepened), there is increasing surprise that gold has not surged to its recent record highs especially as there are deepening shortages of retail bullion internationally and the gold holdings of gold ETFs continue to surge. The election is just 4 weeks away and we are likely to see gold surge soon after.
Snippet from CBS's 60 minutes special on the the problems facing Wall Street. Worth watching as it focuses on some of the less-mentioned causes of the financial crisis, including the role of Credit-Default-Swaps, which were sold alongside the subprime mortgage securities (CDOs) as a way to minimise risk.
Gold rallied yesterday on increasing risk aversion as stock markets continued to crash internationally (gold closed at $880.70 up $18 and silver closed at $11.34 up 7 cents). Gold has surged to new record highs in most major currencies including the Australian dollar, British pound (£517) and euro (€662) as the global contagion deepens.
Gold fell sharply yesterday on lower oil prices and the recently surging dollar, despite unprecedented physical demand for coins and bars in the UK, US and internationally (gold closed at $840.40 down $40.20 while silver closed at $11.57 down $1.04). As warned yesterday, anything is possible in the short term in these markets and leveraged trading in futures, CFDs and spread betting is an extremely high risk endeavour in the current markets and not advisable. Movements in the gold market were very counter intuitive yester
[caption id="" align="alignnone" width="518" caption="Click for larger (readable) version"][/caption] Yet Gold is off $28 and Silver $1.20 today. What is going on in the futures market?
Gold rose yesterday despite continuing dollar strength and falling oil prices (gold closed at $880.80 up $6.80, while silver closed at $12.71 up 53 cents).
Gold fell yesterday as the dollar rallied (gold closed at $874.00 down $14.40 while silver closed at $12.18 down 75 cents). In after hours trading there was determined selling which pushed the price as low as $860 prior to rallying above the New York close and as high as over $883/oz. In the titanic battle between the gold bulls and the gold bears, the gold bears and powerful selling entities have again won the short term battle.
Further news about the divergence of the futures and physichal bullion markets.
"Gold Will Be Looked At In A Very Different Light Going Forward" Gold rose yesterday on bank failures and systemic fears in Europe and after the US Congress voted against the Paulson and Bush bailout plan (gold closed at $888.40, up $7.20 while silver closed at $12.93, down 45 cents).
Gold and silver rose slightly Friday (gold closed at $881.20 up $6.80 while silver closed at $13.38 up 19 cents).
New World Financial and Economic Order Gold and silver fell yesterday (gold closed at $874.40 down $13.30 cents while silver closed at $13.19 down 18 cents) despite the wider markets becoming increasingly nervous regarding the possible US bailout. Oil rose but the dollar's strength, despite the litany of increasingly bearish news confronting the world's reserve currency, led to further profit taking and hesitancy by gold longs to take positions.
Physical Demand Surges Internationally on Supply/Demand Fundamentals and Macroeconomic, Inflation and Systemic Risk Gold was flat while silver rose yesterday (gold closed at $887.70 up 90 cents while silver closed at $13.37 up 25 cents) as gold continued to consolidate near eight week highs. The COMEX October gold contract expires later today and there are significant levels of open interest between $890 and $910 which may see bullion constrained until the contract expires whereupon we may see further moves to the upside.