From Adrian Ash<\/p>\n
\nBullionVault<\/a><\/p>\n \nGold Hits New Dollar-Record, Breaks \u20ac1000\/Oz \n <\/strong><\/p>\n \nTHE PRICE OF PHYSICAL<\/strong> gold bullion<\/a> touched a new Dollar-record on Monday \u2013 just $1.25 shy of $1400 per ounce at the start of Asian trade \u2013 before easing back as global stock markets slipped and the US currency rose on the forex market.<\/p>\n \nJapanese, Swiss and Canadian investors saw the gold price continue to rise, however, while the Euro price broke above \u20ac1000 per ounce for the time in 14 weeks.<\/p>\n \nIndian Rupee prices rose to further all-time highs, but consumer demand for gold at Diwali this weekend was “robust”, according to local dealers and international suppliers.<\/p>\n \nLondon’s AM Gold Fix \u2013 where the very largest bullion banks agree a price to settle their clients’ outstanding orders \u2013 today set the price in British Pounds above \u00a3860 an ounce for only the fourth day ever.<\/p>\n \nSilver prices meantime held near last week’s 30-year Dollar highs, briefly trading above $27 per ounce.<\/p>\n \n“The [Dollar] buoyancy of precious metals lasted a few minutes,” says one Hong Kong dealer in a note, “before the metals decided to follow the Euro instead.”<\/p>\n \n“November is likely to see gold prices trade above $1400 but also to experience a correction,” says the latest Precious Metals Monthly<\/em> from Walter de Wet’s team at Standard Bank.<\/p>\n \n“Any dips in price, especially if they are extended in local currencies by Dollar weakness, are expected to generate physical buying and fresh investor interest. This is compounded by the fact that more central banks are appearing as gold buyers.”<\/p>\n \nCentral-bank gold sales, in contrast, are “currently non-existent” says Standard, while the International Monetary Fund’s 403-tonne sale \u2013 begun with the 200 tonnes sold a year ago to the Reserve Bank of India \u2013 may have “already been completed” after Sept.’s sale of 32 tonnes.<\/p>\n \n“The [world’s monetary] system should consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values,” writes Robert Zoellick \u2013 president of development lender the World Bank \u2013 calling for some element of a return to the Gold Standard in today’s Financial Times<\/em>.<\/p>\n \nSetting out a 5-step package “to address the fundamentals of growth” worldwide, Zoellick says that “Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.”<\/p>\n \n“That is not true,” counters Berkeley professor Brad DeLong on his blog, claiming that “markets are using gold as a speculative asset and a hedge” and calling Zoellick “the stupidest man alive.”<\/p>\n \nNew data released on Friday showed speculative traders in New York gold futures and options actually cut their “net long” position (of bullish minus bearish bets) for the third week running in the week-ending last Tuesday, even as gold prices rose 1.6%.<\/p>\n \nSpeculative interest in gold typically grows when the price rises. But as the gold price reached a new record-high for the CFTC’s Commitment of Traders report \u2013 hitting $1351 per ounce the day before the US Federal Reserve unveiled its $800 billion QEII program \u2013 the “net long” held by non-industry speculators shrank by 1%, slipping to a 10-week low equivalent to 937 tonnes.<\/p>\n \nKnown to analysts as “speculative length”, that figure peaked at 1021 tonnes in Oct. 2009. Back then, the total number of all open gold futures and options contracts outstanding was one-quarter smaller than today.<\/p>\n \n“After last week, this week looks very quiet on the data front,” says Investec Bank’s capital markets note today, with “very little on the docket ahead of Thursday’s G20 meetings London,” as a Bullion dealer notes.<\/p>\n \nFollowing Friday’s factory-gate inflation data in the UK \u2013 which showed a surprise jump to 8.7% for output prices \u2013 this week brings German and Chinese consumer-price figures, plus import-price and consumer sentiment from the United States.<\/p>\n \nUK debt led a dip in government bond prices on Monday, nudging the 10-year gilt yield up towards 3.0%.<\/p>\n \nCommodity prices also fell back, with US crude oil contracts retreating from a two-year high near $87.50 per barrel as the Dollar rose.<\/p>\n \nAdrian Ash<\/p>\n \nBullionVault<\/a><\/p>\n \nGold price chart, no delay<\/a> |\u00a0\u00a0 Buy gold online at live prices<\/a><\/p>\n \nFormerly City correspondent for The Daily Reckoning in London and head of editorial at the UK’s leading financial advisory for private investors, Adrian Ash<\/strong> is the editor of Gold News<\/a> and head of research at BullionVault<\/a> \u2013 winner of the Queen’s Award for Enterprise Innovation, 2009 and now backed by the mining-sector’s World Gold Council<\/a> research body \u2013 where you can buy gold today<\/a> vaulted in Zurich on $3 spreads and 0.8% dealing fees.<\/p>\n
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