Gold climbed as much as $54.98 to $1,878.90, a new all-time high

The gold price soared to a new series of record highs on Friday as sovereign debt and recession worries continue to pressure Wall Street. The spot price of gold climbed as much as $54.98 to $1,878.90, a new all-time high, before paring its gains prior to the open of U.S. equity markets. The SPDR Gold Trust (GLD), the most liquid gold price proxy in the equity markets, surged $2.58 to $180.30 per share in pre-market activity. COMEX gold futures, per the December contract, hit a new record of $1,881.40 per ounce earlier this morning.

A primary catalyst for strength in the gold price has been escalating concerns over the European sovereign debt and banking crises. Yesterday, the Wall Street Journal reported that U.S. regulators were elevating their scrutiny of European banks’ liquidity, while a Swedish regulatory agency warned banks that they should do take additional measures to prepare for a funding crisis. Data from the European Central Bank on Wednesday also revealed that an unnamed financial institution borrowed $500 million from a dollar facility that had not been utilized for several months.

These developments have led to widespread selling in European markets. However, the euro currency has held up relatively well, at least against the U.S. dollar. On Friday morning, the euro climbed 0.5% to 1.4409 against the dollar.

In the U.S., disappointing economic data has continued to roll in, sparking fears of a renewed recession. Yesterday, weekly jobless claims came in modestly above expectations, at 408,000 versus the 400,000 consensus estimate among economists. Existing homes sales were reported at 4.67 million, below the 4.87 million expected. While those two data points were disappointing, they were dwarfed by the Philadelphia Fed Index, a key gauge of manufacturing activity. At negative 30.7, the Index missed the 1.0 consensus estimate among economists by a huge margin.


Comments

Post a Comment

Popular posts from this blog

Gold edges up on weaker dollar, dovish U.S. Fed policy bets

Image
 Gold edged higher on Monday, helped by a weaker dollar and expectations that the U.S. Federal Reserve will reiterate its dovish monetary policy stance this week. Spot gold was up by 0.1% at $1,943.58 per ounce. U.S. gold futures rose 0.1% to $1,950.10 per ounce. “Gold is firm on the basis that the Fed could adopt a further dovish message with respect to average inflation targeting,” said Michael Hewson, chief market analyst at CMC Markets UK. “If you want to have a policy of average inflation targeting, you’re going to have to go into detail as to how you are going to arrive at that particular outcome.” The dollar retreated on Mond ay, bolstering gold’s appeal for investors holding other currencies, ahead of the Fed’s policy decision due on Wednesday. “If inflation forecasts remain at 2% or below, this could offer gold a tailwind as the zero-yielding metal thrives in a low-interest rate environment,” said FXTM analyst Lukman Otunuga. Market participants are also waiting
Read more

For the gold price, two outcomes are possible.

Image
For the gold price, two outcomes are possible. First is a return to or near the April low ($1,277.40). Second is a drop to a lower low, $1,240 - $1,260. Yet a third possible outcome is that the June and December lows were not a double bottom and one further drop may come. I account that the least likely, and look for a low here by the end of the week, but I'm no more'n a nacheral born durnd fool from Tennessee, so what do I know?   You'd think that an institution charged with promoting the gold industry would produce reports that at least cast the best light on gold's prospects. You'd think wrong, if you're thinking about the World Gold Council. They've been negative on gold for, oh, the last 14 years or so. Today they issued a report that contained a nugget about Chinese business using physical gold as collateral for bank credit ($40 bn worth) but they managed to tease a gloomy forecast even out of this inventive monetary use. That and bad
Read more

India, not Trump, is the real reason behind the crash in gold prices

Image
If you have been puzzled about the crash in gold prices after Donald Trump's election, you are in the company of almost every analyst and media outlet in the western world. Gold and silver are a major part of the research at The Arora Report. A combination of our proven precious metal algorithms, extensive resources and knowledge of the emerging markets led us to alert subscribers to The Arora Report early that gold was about to crash and the reason behind it. Immediately after the election, the net position of The Arora Report in gold, silver and miners has been short as part of a sophisticated strategy.
Read more