LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
Gold Surges as Oil Hits Record and Stocks Plunge



-- Posted Friday, 27 June 2008 | Digg This ArticleDigg It! | Source: GoldSeek.com

The Morning Gold Report by Peter A. Grant

June 27 a.m. (USAGOLD) -- Gold has surged to a new one month high, underpinned by a new record high in oil, a weakening dollar and plunging global stocks.

US stocks are under pressure again today after the DJIA lost 358.41 points on Thursday, or just over 3%. Stocks were sent reeling by a series of downgrades, particularly in the automotive and banking sectors, as well as new record high in oil.

We've been espousing the vulnerability of the stock market for quite some time now. We thought that the upticks in the Dow above 13,000 seen in May were unsustainable and that the lows for the year at 11,530.12 were likely to be retested. Those lows have now been exceeded and the Dow is now trading at levels not seen since late in the summer of 2006.

A close below 11,331.62 would confirm a bear market in the Dow. Such a move would shift focus to the 10,600/10,000 range initially, although potential would be significantly lower. Imagine where stocks might be if the Fed had taken a decidedly more hawkish stance on Wednesday.

It just goes to show the extent to which we've been painted into a corner by US, and global, monetary policy. The piper is always going to demand payment at some point.

With a dual mandate of price stability and sustainable growth/employment, the Fed is essentially a slave to two masters. They have decided that for now inflation is the lesser evil when measured against the substantial risks to growth and employment. I don't envy Chairman Bernanke with his job.

Yields are dropping as expectations of a Fed rate hike this year continue to erode, making treasuries less attractive as an option for a store of wealth. Given the rate of inflation, going to cash is certainly not a logical choice.

For these reasons, we look for gold to continue to benefit from diversification flows out of the stock market. Physical gold is your best option for wealth preservation in these tough economic times.

Gold is bedrock.

Yesterday's release of existing home sales was a little bright spot in an otherwise gloomy financial news day. Sales of previously owned homes climbed 2% in May to an annual rate of 4.99M units. This was better than the market was looking for and suggests that buyers are starting to return to the market. However, that is still 15.9% below the pace of a year ago.

The inventory of existing homes was drawn down 1.4%, but there is still a 10.8 month supply of available homes based on the current rate of sales. That's going to keep downward pressure on prices as the market attempts to work through that large inventory and as the high rate of foreclosure continues to add to inventory.

The national median existing home price dropped to $208,600, down from $222,700 last May, a decline of 6.3% y/y. This, along with housing data released earlier in the week continues to paint a pretty grim picture.

Sales of new homes in May were down 2.5%, with average prices dropping 5.7% from a year ago. Meanwhile the S&P Case-Shiller home price index showed that home values in 20 major US cities declined 15.3% y/7 through Apr.

While US personal income for May rose by 1.9%, the continued decline in housing and fresh losses in the stock market have most people feeling quite a bit poorer these days. Unfortunately these two trends, along with inflation are likely to continue.

It's not too late to diversify your portfolio with a physical gold purchase. Those that do will certainly weather this economic storm in far better shape than those that don't buy gold.

Next week's release of the USAGOLD - Centennial Precious Metals Survey of Investments will clearly show which asset classes have been outperforming of late. However, the best performer over the past year has been...well you'll just have to wait until next week to get that info.

If you're not already a member of the USAGOLD NewsGroup, sign-up today and you'll receive the Survey of Investments as soon as it is released.

Gold Market Movers:

U. Michigan sentiment for June (final) fell to 56.4, versus 56.7 preliminary figure and 59.8 in May.

US personal income for May rose 1.9%, above market expectations. PCE +0.8%.

Canada RMPI +3.1%, industrial product prices +0.6%.

German inflation for June accelerated to 3.3% y/y.

Eurozone ESI sentiment for June fell to 94.9, below market expectations, versus 97.6 in May.

Swiss KOF for June fell to 1.01.

UK Q1 GDP revised down to 0.3%.

Japan core CPI for May +1.5% y/y, a 10-year high.

Fed aided Wall Street to avert "contagion"

$7 per gallon gas coming soon?

Dow to start Friday on brink of bear market

Stag, hyper & gold price inflation

Fitch withdraws ratings for Ambac, MBIA

GM shares drop to 53-year low

Citigroup will need to write down $9bn in second quarter, analyst predicts

Merrill may post loss, $5 billion writedown, CNBC reports

Opinions expressed in commentary on the USAGOLD.com website do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any precious metals product, nor should they be viewed in any way as investment advice or advice to buy, sell or hold. Centennial Precious Metals, Inc. recommends the purchase of physical precious metals for asset preservation purposes, not speculation. Utilization of these opinions for speculative purposes is neither suggested nor advised. Commentary is strictly for educational purposes, and as such USAGOLD - Centennial Precious Metals does not warrant or guarantee the accuracy, timeliness or completeness of the information found here.

Pete Grant is the Senior Metals Analyst and an Account Executive with USAGOLD - Centennial Precious Metals. He has spent the majority of his career as a global markets analyst. He began trading IMM currency futures at the Chicago Mercantile Exchange in the mid-1980's. In 1988 Mr. Grant joined MMS International as a foreign exchange market analyst. MMS was acquired by Standard & Poor's a short time later. Pete spent twelve years with S&P - MMS, where he became the Senior Managing FX Strategist. As a manager of the award-winning Currency Market Insight product, he was responsible for the daily real-time forecasting of the world's major and emerging currency pairs, along with the precious metals, to a global institutional audience. Pete was consistently recognized for providing invaluable services to his clients in the areas of custom trading strategies and risk assessment. The financial press frequently reported his personal market insights, risk evaluations and forecasts. Prior to joining USAGOLD, Mr. Grant served as VP of Operations and Chief Metals Trader for a Denver based investment management firm.


-- Posted Friday, 27 June 2008 | Digg This Article | Source: GoldSeek.com




 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

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.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC 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, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.