Gold Spot gold was trading at $679.50/680.00 an ounce as of 1215 GMT.
Gold has traded sideways to slightly down in Asian and European trading after yesterday's strong performance with gold rallying 1.3% to $682.30.
Gold easily took out the resistance at $675 and looks likely to challenge the psychologically important $700 in the coming weeks.
This is especially the case with the very robust physical demand internationally and the continuing decline in gold supply. Gold output fell in South Africa, the world's largest producer, by a very significant 7.5% in the second quarter versus the same period last year due to lower grades, the SA Chamber of Mines said yesterday. This follows similar falls in other gold producers and China is the only gold producer who has managed to increase production significantly in the last year despite higher gold prices.
This confirms that last Friday's third highest monthly close for gold ever is no flash in the pan rather a strong secular bull market based on strong technical and more importantly fundamental factors. A massive base has been built in recent months with smart money accumulating on the dips and we look likely to soon see the next leg up in this secular gold bull market. Liquidity Crisis Continues There are further signs that the global liquidity crunch is far from over. The FT reports that capital markets face a critical period, which will determine how the financial system copes with this summer’s credit sector “heart attack”, a senior international banker warned on Tuesday. Hans Jörg Rudloff, chairman of Barclays Capital, said the next four to six weeks would be crucial as investors tried to establish new price levels for risk and banks expanded balance sheets to take on assets held by stricken investment vehicles.
“This is the big question: are we capable of establishing a new price level for these assets? If we stay stuck, the patient is going to die,” Mr Rudloff said in a speech to Russian executives in Moscow.
The money markets are notably failing to offer any reassurance. While the tone of equity markets has calmed, the sense of crisis in the interbank markets actually appears to be growing -- especially in London. In particular, the cost of borrowing funds in the three-month money markets -- as illustrated by measures such as sterling Libor or Euribor -- is continuing to rise, suggesting a frantic scramble for liquidity among financial groups.This trend is deeply unnerving for policymakers and investors alike, not least because it is occurring even though the European Central Bank and the US Federal Reserve have taken repeated steps in recent weeks to calm down the money markets. "What is happening right now suggests that the moves by the Fed and ECB just haven't worked as we hoped," admits one senior international policymaker. Or as UniCredit analysts say: "The interbank lending business has broken down almost completely. ... It is a global phenomena and not restricted to just the euro and dollar markets."
If this situation continues, it could potentially have very serious implications.
In a related development, the Wall Street Journal says in a report today that though few investors realize it, banks such as Citigroup Inc. could find themselves burdened by affiliated investment vehicles that issue tens of billions of dollars in short-term debt known as commercial paper.
The investment vehicles, known as "conduits" and SIVs (which stands for Structured Investment Vehicles), are designed to operate separately from the banks and off their balance sheets.
Citigroup, for example, owns about 25% of the market for SIVs, representing nearly $100 billion of assets under management. The largest Citigroup SIV is Centauri Corp., which had $21 billion in outstanding debt as of February 2007, according to a Citigroup research report. There is no mention of Centauri in its 2006 annual filing with the Securities and Exchange Commission.
Yet some investors worry that if vehicles such as Centauri stumble, either failing to sell commercial paper or suffering severe losses in the assets it holds, Citibank could wind up having to help by lending funds to keep the vehicle operating or even taking on some losses.
Silver Spot silver is trading at $12.21/12.23 an ounce (1215 GMT).
PGMs Platinum was trading at $1272/1277 (1215 GMT). Spot palladium was trading at $330/334 an ounce (1215 GMT).
Oil Light, sweet crude for October delivery was down 2 cents at US$75.06 a barrel by 1200 GMT in European electronic trading on the New York Mercantile Exchange. A U.S. hurricane expert Tuesday predicted that five more hurricanes are likely this season. Two of the hurricanes would be major, said Colorado State University forecaster William Gray.
Financial Regulation: Gold & Silver Investments Limited trading as Gold Investments is regulated by the Financial Regulator as a multi-agency intermediary. Our Financial Regulator Reference Number is 39656. Gold Investments is registered in the Companies Registration Office under Company number 377252. Registered for VAT under number 6397252A. Codes of Conduct are imposed by the Financial Regulator and can be accessed at www.financialregulator.ie or from the Financial Regulator at PO Box 9138, College Green, Dublin 2, Ireland. Property, Commodities and Precious Metals are not regulated by the Financial Regulator
Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: The value of investments may fall or rise against investors’ interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. Past experience is not necessarily a guide to future performance.
All the opinions expressed herein are solely those of Gold & Silver Investments Limited and not those of the Perth Mint. They do not reflect the views of the Perth Mint and the Perth Mint accepts no legal liability or responsibility for any claims made or opinions expressed herein.
Fair Use Notice: This newsletter contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of financial and economic significance. At all times we credit and attribute the copywrite owner and publication.We believe this constitutes a 'fair use' of any such copyrighted material as provided for in Copyright Law. The material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for economic research purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.
Gold Investments Tower 42, Level 7 25 Old Broad Street London EC2N 1HN United Kingdom Ph +44 (0) 207 0604653 Fax +44 (0) 207 8770708 Email info@goldinvestments.org Web www.goldinvestments.org
Mission Statement Gold and Silver Investments Limited hope to inform our clientele of important financial and economic developments and thus help our clientele and prospective clientele understand our rapidly changing global economy and the implications for their livelihoods and wealth. We focus on the medium and long term global macroeconomic trends and how they pertain to the precious metal markets and our clienteles savings, investments and livelihoods. We emphasise prudence, safety and security as they are of paramount importance in the preservation of wealth.
Gold and Silver Investments Ltd. have been awarded the MoneyMate and Investor Magazine Financial Analyst of 2006.
The content on this site is protected
by U.S. and international copyright laws and is the property of GoldSeek.com
and/or the providers of the content under license. By "content" we mean any
information, mode of expression, or other materials and services found on GoldSeek.com.
This includes editorials, news, our writings, graphics, and any and all other
features found on the site. Please contact
us for any further information.
Disclaimer
The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy
or completeness of the information (including news, editorials, prices, statistics,
analyses and the like) provided through its service. Any copying, reproduction
and/or redistribution of any of the documents, data, content or materials contained
on or within this website, without the express written consent of GoldSeek.com,
is strictly prohibited. In no event shall GoldSeek.com or its affiliates be
liable to any person for any decision made or action taken in reliance upon
the information provided herein.
OilSeek.com
