Tag Archive: gold price news
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Gold Price Rockets
Before I begin this article – I have to immediately apologise for the title. Yes you guessed it, I am indeed referencing North Korea. It is in truth a bad joke – not North Korea but my use of the word rockets. Over the last couple of weeks we have seen a significant rise in the gold price. As I sit and write this article, the price of gold is up by $12. So what has happened to the gold price and why is it up?
Gold Price Stats
The gold price currently sits at £1034.52 / $1338.85 / €1126.45 respectively. Exactly three weeks ago today the London Bullion Markets Association morning gold fix (LBMA) was £987.34 / $1281.10 / €1085.48. That is an increase of +4.77% in GBP / +4.51% in USD / +3.77% in EUR.
If we compare this information with how Sterling (GBP) was performing against USD and EUR it will give us a better focus of what has occurred in the market.
At present GBP sits at 1 GBP:1.29442 to USD and 1 GBP:1.08850 to EUR. Three weeks ago today GBP sat at 1 GBP:1.29774 and 1 GBP:1.10106 to EUR. In the three weeks sterling has depreciated virtually nothing against USD (about 0.00751% – I almost omitted this from the article but thought it would be fun to include it!) and -1.14% against the EUR in three weeks. The real winner over the last couple of weeks has been the Euro with gains against most major currencies.
So the information above points more towards a slim support in the gold price from the USD weakning. As is the case sometimes, currency movements can be the cause and are usually a marker that I would use to see how gold is trading but actually, the gold price hasn’t generally been much affected by that. The Dollar has lost ground against the Euro, of approximately -0.89%, but that would have had limited effect on the gold price.
So then why has the gold price risen over 4% in three weeks?
Gold Price Analysis
In essence it is down to really a handful of reasons, one of which I alluded to at the start. But you may also be surprised to see what else has left an impression on the gold price:
Firstly and probably at the lowest end of the scale, we are just coming out of Summer. Traditionally when you study the output of trading across the end of July and August period, trading is down as many people are on holiday. That does believe it or not have some bearing on the price, not a lot of course but it has to be considered.
Secondly, President Donald Trump’s decision to go ahead with the Mexican Wall by granting four provisional contracts helped to spike the gold price. For many analysts this endeavour seemed unlikely to ever come to fruition but as is the case with Mr Trump, never underestimate him and expect the unexpected (I’m very close to start quoting Leslie Nielsen lines).
Thirdly, we have also been expecting two natural disasters to hit over the last couple of weeks. In the US, Hurricane Harvey landed in Texas and has caused significant damage across the state and neighbouring Louisiana. Also in India, Nepal and Bangladesh we have seen immense flooding following an ongoing monsoon that has displaced hundreds of thousands of people and according to the UN it is estimated to have effected almost 40 million. It has been described as one of the worst humanitarian crisis to affect the region in years.
Lastly and with no real surprise the gold price has risen because of (drum roll please) North Korea. The heightening of tension and pressure in Asia is becoming quite alarming. Firstly, you have had an increase in rhetoric over the last couple of weeks between the US and North Korea with president Trump stoking the fires. This has largely been whipped up due to the missile that bypassed Japan a week ago and this weekend’s alleged successful hydrogen bomb test by North Korea. Comments made this weekend by President Trump regarding North Korea were never going to be anything but inflammatory. The President tweeted that North Korean actions were “Hostile and Dangerous” he also wrote “North Korea is a rogue nation” and in another tweet he suggested that North Korea will only understand negotiation on one level, meaning a show of arms. Over the weekend Mr Trump also stated that any countries trading with North Korea, the US will not do business with which was more or less a direct provocation aimed at China. This is thought to have serious implications with relations over the coming weeks.
In all, the gold price as it has always been, is acting as a safeguard. As crises after crises loom, the metal is going to stay heavily supported and I cannot see how the North Korea issue is going to play out. Do I need to start work on that bunker yet? Probably. Where’s my shovel…
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Why is the Gold Price Up 6.35% in Sterling this Month?
It isn’t long after writing my gold forecast for 2016 that I am re-reading it and thinking how much more of it will come true.
As I had suggested in it, so far this year we have had middle-eastern rising tensions and poor data from China, two prominent aspects of my gold forecast that were set to boost the price. The one augury in my forecast that I thought would happen sooner rather than later was a Bank of England rates rise. In my mind the UK were going to have to follow the US sooner rather than later to keep the strength of the pound – but Mark Carney yesterday whilst speaking at Queen Mary’s University London, stated that an interest rates rise for early this year was off the cards. Understandably, as Carney cited yesterday, given the current attenuating global economy, the oil price dropping further combined with poor UK wage growth, an interest rates rise has been pushed back. It is possible that if the global economy conditions continue in this vein, a rates rise may well be set back further than expected: late 2016 early 2017. Click here to read Carney’s full speech here.
The gold price so far: Jan 4th – Jan 20th
In numbers the gold price opened on 4th January:
£725.019 / $1072.70 / €982.299 with currency GBP – USD at 1.4716.
Today Wednesday 20th January, the gold price opened:
£771.081 / $1093.20 / €999.726 with currency GBP – USD at 1.4158.
In total the gold price has moved: £46.062 (+6.35%) / $20.5 (+1.91%) / €17.427 (+1.77%) with currency -0.0558 (-3.79%).
With the Sterling price against the Dollar falling dramatically, with more pressure coming from the Bank of England announcement, gold valued in Sterling is likely to be given an uplift. For how far and for how long, remains to be seen. What I’m convinced of, more now than ever, if the US are intent on more rates rises (which traditionally after a rates rise after recession, more rates rise follow soon after), the US Dollar is going to run away and be overpoweringly dominant. It would not surprise me if a currency correction is in full swing.
Article by Michael Cooper
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Round up of Today’s Gold Price News – Top 3 Articles
A quick look at Today’s gold price news and a brief summary of the Gold Price for the month of July.
Swiss Gold Refinery Valcambi Sold
In today’s gold price news, well-known Swiss gold refiners Valcambi have been sold to the world’s largest Jewellery manufacturer Rajesh Exports Ltd. (REL).
It is no surprise Rajesh Exports have purchased the Swiss refiner. Earlier this year it was reported that the jewellery manufacturer were on the hunt to purchase a refiner and just this month it was widely circulated that REL were looking to take a large stake in Valcambi. Valcambi’s sellers, Newmont Mining Corporation, stated in a press release “we are pleased that Valcambi is being acquired by Rajesh Exports with whom we are continuing our long term contracts and we are confident Rajest Exports will maintain the high standards of Valcambi”
This acquisition has made big news in the gold world, partly because it shows the ambition of the manufacturer to expand its holdings in the precious metals industry. It is more than likely that the purchase will marry together the much sought after Valcambi-Swiss brand with REL’s wider customer base in Asia. To read the full statement Rajesh – Valcambi Press Release.
Dollar Spikes after FOMC Statement & US Data
Afer the FOMC meeting on Tuesday, the committee released a FOMC Full statement on Wednesday with an update about the US markets and indications for the impending interest rates rise. In truth, the minutes did not reveal any information not already in the public sphere and it reinforced the sentiment that it would be looking for specific indicators before any incremental raising of the interest rate “When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.”
Also this week US Weekly Jobless Claims were released, beating the forecast of 275,000 with data of 267,000. US Q2 GDP also released better than expected results with growth estimated to be 2.3%, much improved from the 0.6% last quarter.
Following these announcements, the dollar rose to a one week high and has gained just over 8 percent this year.
Paper Gold Sell-off Continues
After Shanghai’s huge 33 tonne sell-off of gold a couple weeks ago, the ETF sell-off hasn’t been abated. Trade reports have intimated that gold holdings are at their lowest since the end of 2009, with outflows recording their eleventh consecutive day. SPDR Gold Funds (GLD) traded on the NYSE, are currently trading at their lowest since mid October 2009 where the price was near the current 104.27. The volumes trading in Oct ’09 were 357.92M compared to 6.66M currently. It appears there is a more gradual slide with the lower volume of trading, with a majority weighted in selling.
Verdict:- It has been a difficult month for the gold price: at the beginning we were watching the Greek tragedy unfold, we’ve seen growth in the UK & the US, currency battles continuing and the Chinese dumping 33 tonnes of gold, only to publicise the first time in 6 years, they have increased their gold reserves considerably. Gold Price News has been coming thick and fast this month and the price has been forced to 5 year lows. Where will the bottom be?
More gold price news next week
Article by Michael Cooper