|
Wholesale prices to buy gold using
US dollars or British pounds fell Thursday morning to trade just 1% below
their seven-month highs of the last week.
Commodity prices dropped once again with Asian and European equities,
while major-economy government bonds rose after new data showed Chinese
factory output falling and Europe's private-economy contracting at the
fastest pace in three years.
The euro also slipped Thursday morning, extending this week's drop from
four-month highs.
That buoyed prices to buy gold in
euros back to €1360 per ounce (€43,725 per kilo) – barely
1% below Sept. 2011's all-time high.
"While the uptrend [in dollar gold] is still intact, price action is
lackluster and we have been moving sideways for the past 4 sessions,"
notes Russell Browne, strategist at Scotia Mocatta
in his latest technical analysis.
Overnight in Asian trade, "There was another significant flushout" in crude oil prices, says Alex Thorndike,
senior precious metals trader at MKS Capital in Sydney – now down to a
six-week low.
"Precious [metal trade] was heavy on the back of this move,"
says Thorndike, reporting "a significant wash out for the yellow metal
in a fairly brutal sweep."
"Short-term," adds a technical analysis from London
market-makers Société Générale – and pointing to a
continued "down trend" off September 2011's all-time high –
prices to buy gold in
dollars this morning "broke the steep channel support line which was in
place since early September.
"A further correction will develop to 1756/53 then 1745 and
1736."
As the dollar gold price
steadied around $1760 per ounce late-morning in London, the price of silver bullion also bounced from a 2-session low
vs. the US dollar.
Priced in the euro, silver today traded at €26.50 per ounce
(€852 per kilo) – up 25% since mid-June.
"While [gold] is included in the commodities basket, it is in fact a
medium of exchange and one that is officially recognised
– if not publically used as such," write Deutsche Bank analysts
Daniel Brebner and Xiao Fu in a new report this
week.
"We see gold as an officially recognised
form of money for one primary reason: it is widely held by most of the
world's larger central banks as a component of reserves."
Going further, "Gold is the only currency," said CNBC TV host,
self-declared entertainer and educator Jim Cramer to TheStreet.com – the financial site he
co-founded in 1996 – on Wednesday.
"People say to me, 'What is the one currency you can trust?' I come
back and say, 'Gold, because there is such a tremendous scarcity.'
"People regard it as a precious metal. I think that's the wrong
call."
Back in the wholesale gold
bullion market meantime,"The flow
of business remains dull in the physical space," says one London dealer
in a note, "with Indian demand completely off despite being the high
season of purchases in front of Diwali."
Luxury goods including watches, pens and iPads
"are set to replace gold and silver coins" and religious items as
corporate gifts during this year's Hindu “festival of lights”
– falling in mid-November 2012 – reports the Economic
Times today from Ahmedabad and Kolkata.
"The popularity of gold recycling," adds the Wall Street
Journal – which cites industry officials and analysts
– "is [also] likely to weigh on gold
demand in India, the world's biggest consumer of physical
gold."
So far in 2012 some 40% of Indian gold sales have in fact been exchanges
of old items, reckons Prithviraj Kothari, president
of national trade body the Bombay Bullion Association. That's up from 20%
previously.
Opposition parties in India called for a national strike – closing
many jewelers as well as other shops, schools and government buildings
– in protest at the latest rise in official diesel fuel prices.
Central government workers and pensioners may get a rise to match that
inflation in their Dearness Allowance, a cost-of-living bonus given to some 8
million people, according to local press.
|
