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Gold is Experiencing Record Demand: So Why Have Prices Fallen?
Having spawned the worst market for stocks since the Great Depression, the global financial crisis is forcing investors to re-examine a number of long-held beliefs. Gold bugs, for instance, have been left to wonder just how gold prices could backpedal in the face of all-time-record demand.
Gold demand did increase – in fact, by a record 45% from the second quarter to the third.
Retail demand was the primary catalyst, spiking 121% to 232 tons. And because of it, bullion dealers reported shortages in bars and coins, according to the World Gold Council, a gold-mining-industry association.
“Gold’s universal role as a…
21Nov2008 | Money Morning | 0 comments | ContinuedFive Ways to Play Gold’s Rebound to $1,500 an Ounce
Gold hit two historic milestones in 2008.
First, in early March, the “yellow metal” hit its all-time high of $1,030 an ounce.
Just three months later, the price of gold for December delivery had plummeted to $681 an ounce, a 21-month low and 33.9% drop from its record high.
Most gold bugs were equal parts puzzled and broken-hearted. The world’s stock markets tanked, as did some of its biggest economies. In such an environment, they thought, gold should have risen. After all, gold is widely considered to be a safe-haven investment when everything else is spiraling south.
However, Money Morning Contributing Editor…
17Nov2008 | Money Morning | Comments Off | ContinuedGold and Oil Prices
Correcting Gold and Oil
What’s going on with gold and oil?
Here’s what we know. Prices for both gold and oil were moving upward for most of the spring and well into summer. Then prices hit a peak. Gold touched $980 per ounce. Oil topped $146 per barrel. Now prices are falling.
Back when oil was in the $140s, I said — in both print and broadcast interviews — that oil prices were running up too far, too fast. I predicted that oil prices would decline to $100-110, based on the fundamentals. Well, we’ve seen the decline and we’re almost there.
High oil prices…
21Aug2008 | Whiskey and Gunpowder | Comments Off | ContinuedInvesting in Gold
Waiting for Gold’s Next Rally
Last week we saw a bounce in the stock market that threatened to send the price of gold down to the $920 mark. After a lightening advance celebrating the approval of the quasi-nationalization of America’s too-big-to-fail mortgage providers, the market caved on reports of continued stress in the homebuilders.
The Dow gave back almost five days’ worth of gains in one fell swoop.
So should we not have seen a better bounce in gold? Maybe it’s too early to call the Dow.
Further weighing on gold prices were a lifeless bounce in oil and the market’s shift in focus…
30Jul2008 | Whiskey and Gunpowder | Comments Off | ContinuedIn the Valley of Gold
What you make of the gold market right now depends on what you make of the kind of data UBS’s precious metals team follows.
Big institutional players in the New York futures market slashed their bullish betting on gold in the week of June 10. Data from the CFTC — the U.S. regulator — shows a net reduction of 11 percent in the long gold positions held by what it calls “large speculators.â€
And this “reduction in the gross longs maybe a further sign that gold is losing its attraction,†reckon analysts at the Swiss banking and wealth management giant.
But less pressure…
21Jun2008 | Whiskey and Gunpowder | Comments Off | ContinuedDollar Reversal: Prepare for oil and gold prices to drop this week!
Net shorts on a decline in the euro came in at 21,315 on April 29 — compared with net longs of 18,907 a week earlier, according to the Commodity Futures Trading Commission (CFTC). Currency strategists now expect the dollar reversal to reach $1.52 within the next few days.
That’s not a whole lot, compared to the epic decline of the greenback against the euro and almost all other major currencies over the past four years. So far, however, the U.S. currency has appreciated 3.6 percent from its record low of $1.6019 on April 22.
(As a reminder, $1.60 per euro had been…
5May2008 | J. Christoph Amberger | Comments Off | Continued
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