Gold Investments Market Update - Gold Smashes through Resistance
-- Posted Monday, 24 November 2008 | Digg This Article | Source: GoldSeek.com
Gold gains 6% in one week
In a remarkable week for the yellow metal, strong resistance at $770 last Monday may now be the level of support as Gold rallied on Friday, finishing up $50 on the day, 6% on the week. It is currently trading at $822 (1230 GMT) and a sustained move above $800 could signal an upswing towards the $850 level, again confirming Gold's safe haven demand as stock markets continued to fall sharply amid continuing woes in the US financial sector (as graphically illustrated by Citigroup). Silver could also be about to make a move to the upside. It has been in a downward trendline since the summer but traded up to it that line on Friday and above the trendline today. Silver is currently trading at $10.02 and a close above $9.50 today could be very positive for the price.
Shop 'til you drop urges UK Chancellor
Alistair Darling, the UK Chancellor, is expected to announce in his pre-Budget report, a temporary cut in the VAT rate from 17.5% to 15% in the hope that the immediate rate change will boost Christmas shopping and prompt Britain to shop its way out of a recession. The proposed package flies in the face of the views of an unnamed British retailer, reportedly one of the biggest, that the plan to cut VAT will do little to stimulate the retail market, with the High Street already aggressively slashing prices in the run up to Christmas. This is further compounded by the news that Credit Insurers who provide insurance to suppliers in the credit period agreed with the retailer have been withdrawing this cover due to an increase of 60% in claims as more and more retailers find that they cannot pay the supplier.
Bad Banks
The US Government entered into an agreement with Citigroup, to backstop $306bn in problematic assets and provide a capital injection of $20bn to try and restore confidence in the bank that is, apparently, "too big to fail."
Barclays executives will probably not be in for a smooth ride this evening at the meeting they called with investors to approve a £7bn capital raising with Middle Eastern investors. If approved, the Qatar Investment Authority and Sheikh Mansour Bin Zayed Al Nahyan, a member of the Abu Dhabi royal family, will own about a third of the bank.
The Swiss chief bank regulator has warned that UBS may need more than the CHF 6bn in state capital already committed.
Bring back the link between Gold and the Dollar
This article in today s FT is one of the most perceptive articles as to how the current financial and economic crisis came about (looking at it from the important historical perspective) and how gold may again have an important role to play in the monetary system in the coming years.
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