What is affecting the gold price
From what the media is saying- it is stuff as down to earth as the weather forecasts which is driving the gold price (as gold price moves with the oil price) not so much all this geopolitical China/Iran speculation.
From Bloomberg today.....
Oil Jumps, Approaching $60, as Cold Weather Increases Fuel Use
By Mark Shenk
Feb. 6 (Bloomberg) -- Crude oil rose, approaching $60 a barrel, on speculation that U.S. heating-oil inventories will drop because of a cold-weather system covering the eastern half of the country.
Home-heating demand in the Northeast, the region responsible for 80 percent of U.S. heating-oil use, will be 24 percent above normal for the next week, said Weather Derivatives, a forecaster in Belton, Missouri. U.S. supplies of distillate fuel, a category that includes heating oil and diesel, probably fell 2.88 million barrels last week, a Bloomberg News survey showed.
``There's been a significant reversal in a number of supply and demand factors that pushed us lower in January,'' said Jason Schenker, an economist at Wachovia Corp. in Charlotte, North Carolina. ``The colder weather and increased distillate demand are major factors. OPEC output cuts and stronger-than-expected U.S. economic growth are also contributing to the rally.''
Crude oil for March delivery rose $1.13, or 1.9 percent, to $59.87 a barrel at 9:07 a.m. on the New York Mercantile Exchange. Futures touched $59.99, the highest intraday price since Jan. 3. Prices are 8.1 percent lower than a year ago.
``Yesterday was probably the peak of this cold snap but today won't be much better,'' said Eric Wilhelm, a meteorologist at AccuWeather Inc. in State College, Pennsylvania. ``Yesterday most of the I-95 corridor only got into the teens.''
Interstate-95 is a highway that connects the major cities of the Northeast U.S. from Washington to Boston.
``Things may moderate in the next few days but not by a lot,'' Wilhelm said. ``I don't see any warmer-than-normal temperatures in the Northeast or Midwest for the next week.''
The National Weather Service predicted that below-normal temperatures will persist in the eastern half of the U.S. except Florida through Feb. 19.
Brent crude oil for March settlement rose $1.24, or 2.1 percent, to $59.34 a barrel on the London-based ICE Futures exchange.
From what the media is saying- it is stuff as down to earth as the weather forecasts which is driving the gold price (as gold price moves with the oil price) not so much all this geopolitical China/Iran speculation.
From Bloomberg today.....
Oil Jumps, Approaching $60, as Cold Weather Increases Fuel Use
By Mark Shenk
Feb. 6 (Bloomberg) -- Crude oil rose, approaching $60 a barrel, on speculation that U.S. heating-oil inventories will drop because of a cold-weather system covering the eastern half of the country.
Home-heating demand in the Northeast, the region responsible for 80 percent of U.S. heating-oil use, will be 24 percent above normal for the next week, said Weather Derivatives, a forecaster in Belton, Missouri. U.S. supplies of distillate fuel, a category that includes heating oil and diesel, probably fell 2.88 million barrels last week, a Bloomberg News survey showed.
``There's been a significant reversal in a number of supply and demand factors that pushed us lower in January,'' said Jason Schenker, an economist at Wachovia Corp. in Charlotte, North Carolina. ``The colder weather and increased distillate demand are major factors. OPEC output cuts and stronger-than-expected U.S. economic growth are also contributing to the rally.''
Crude oil for March delivery rose $1.13, or 1.9 percent, to $59.87 a barrel at 9:07 a.m. on the New York Mercantile Exchange. Futures touched $59.99, the highest intraday price since Jan. 3. Prices are 8.1 percent lower than a year ago.
``Yesterday was probably the peak of this cold snap but today won't be much better,'' said Eric Wilhelm, a meteorologist at AccuWeather Inc. in State College, Pennsylvania. ``Yesterday most of the I-95 corridor only got into the teens.''
Interstate-95 is a highway that connects the major cities of the Northeast U.S. from Washington to Boston.
``Things may moderate in the next few days but not by a lot,'' Wilhelm said. ``I don't see any warmer-than-normal temperatures in the Northeast or Midwest for the next week.''
The National Weather Service predicted that below-normal temperatures will persist in the eastern half of the U.S. except Florida through Feb. 19.
Brent crude oil for March settlement rose $1.24, or 2.1 percent, to $59.34 a barrel on the London-based ICE Futures exchange.
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Atilla
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AlexBB said:
AlexBB old boy... There is no direct relationship between oil and gold. Look for direct relationships rather than indirect ones.
The weather moving price of Oil so dramatically from $50 to around $60.
This is ridiculous.
Now you suggest it's the weather moving the price of gold (indirectly you suggest.
So we have had a spell of winter and some snow. It always snows in North America. What's new?
I'm sorry but I really don't accept the news in your article nor do I believe your relationship between oil and gold. Look back at previous winter temperatures and the price of oil and gold and I'd be interested to know if you see a relationship.
Tehran warns US against attacks - Carries out war exercises.
Gold bulls had a good day today. I'm raising my stop limit to $650. $670 is well within site.
Atilla
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Couple of significant pieces of news in my opinion...
Merkel warns Iran
Germany with the election of Merkel announced closer relationship with the US as a way of turning round their economy. Not sure about this as whilst it aligns it self with the UK, it contradicts Chirac/French point of view. Either way Merkel's influence is likely to be as much as that of US. Given their close proximity to Russia and gas supplies I'm not sure Merkel/Germany have got a handle on the situation.
Putin attacks 'very dangerous' US
Russia and China will not allow the US to occupy the oil fields in M.East. Now we are seeing it in public announcements.
I think news like this will continue to flow and be digested with more and more alarm bells.
What do these Fundamental pieces of news mean to our trading? No change in my opinion but only re-inforcement.
Gold will continue to rise. In the absence of peace $700 would look cheap.
In the absence of a contained proxy war $1000 is not beyond imagination.
I can't see EURUSD falling below 1.2985-1.2950. In fact I believe it will rally and the USD will fall coupled with increased $200+bn borrowing for wars. Some people are talking about a new trend for the EUR. I believe it to be so.
Oil will touch $70+ once offensive starts.
I'm more bullish on Gold then I have ever been before. If we breach upper resistance level of 672 - 675 then 700+ will be only a matter of days.
Merkel warns Iran
Germany with the election of Merkel announced closer relationship with the US as a way of turning round their economy. Not sure about this as whilst it aligns it self with the UK, it contradicts Chirac/French point of view. Either way Merkel's influence is likely to be as much as that of US. Given their close proximity to Russia and gas supplies I'm not sure Merkel/Germany have got a handle on the situation.
Putin attacks 'very dangerous' US
Russia and China will not allow the US to occupy the oil fields in M.East. Now we are seeing it in public announcements.
I think news like this will continue to flow and be digested with more and more alarm bells.
What do these Fundamental pieces of news mean to our trading? No change in my opinion but only re-inforcement.
Gold will continue to rise. In the absence of peace $700 would look cheap.
In the absence of a contained proxy war $1000 is not beyond imagination.
I can't see EURUSD falling below 1.2985-1.2950. In fact I believe it will rally and the USD will fall coupled with increased $200+bn borrowing for wars. Some people are talking about a new trend for the EUR. I believe it to be so.
Oil will touch $70+ once offensive starts.
I'm more bullish on Gold then I have ever been before. If we breach upper resistance level of 672 - 675 then 700+ will be only a matter of days.
Attachments
Old Piece of Wisdom from Greenspan
Greenspan's comments made 40 years ago!
http://www.gold-eagle.com/greenspan041998.html
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Atilla....... watching and waiting....
Greenspan's comments made 40 years ago!
http://www.gold-eagle.com/greenspan041998.html
---------------------------------------------------------------------------------------------------------------------------
Atilla....... watching and waiting....
Atilla
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Hook Shot said:
Sounds like a text book essay on barter economies, currencies and the gold standard. Agree with it absolutely.
This is precisely what I fear in the $ the predominant world currency is fast losing it's value and integrity. The PPT might have sounded like a good idea but I see it as a nail in the $ coffin.
Also, economies like people have problems adopting to fast change. In the last 5 years the £ has risen almost by 35-40% against the $.
The Euro by 50-60%.
The US is purely existing/trading on it's past industrial & economic reputation. That reputation / strength no longer exists IMO. Totally over rated.
Once investors and governments see the Fed is unwilling / unable to support the $ people will be dumping it like no tomorrow. Even if you raise interest rates if people don't have confidence in your ability to perform who will lend you money. This is already happening imo with moves to gold, euro and other currencies and investments.
The PPT supporting the US economy is a farce - a temporary gloss on a long term infrastructure problem. When you don't have real productivity or growth pumping money into a system further increases peoples wealth effect and expenditure backed up by fictional worthless share valuations. Even if people sell their assets as Greenspan points out will the financial system be able to honour peoples true wealth valuations. Night mare scenario...
Rock on Gold...
Atilla said:
hmmmmmmmm..I'll pass on that. ..I like your reasons for being bullish over the longer term ..i suppose I will sit tight for a bit and wait for Ahmedinejebad tnext o open his mouth and spoil the fun for everone. BTW that was interesting news that came out yesterday..the EU has basically conceded that their diplomacy in Iran has achieved nothing after 3 years. A big setback for Europoseur politics and would have been a boost for the Neocons war in Iran if only they had the confidence left in them..
Atilla
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AlexBB said:
I suspect market is waiting for big UN meeting on the 21st of Feb re:Iran.
Putin going to Saudi was not for trade as the news announced. More like to tell them an attack on Iran will not be tollerated. Russia will not allow the US to colonise the ME more than they already have. That's after his tough speech which the US has played down.
Russia is also raising eyebrows about NATO in Europe and the new changes taking place in it's other back yard.
The Korean news was more PR than substance. If you look at it it's full of holes and US has won nothing other than sweep it under carpet. Could be because Korea has no oil...
Korea has Nuclear weapons - tried and tested. Korea is not transparent.
Iran has no nuclear weapons - non tried or tested. Iran has been very transparent and signed up to Nuclear agreements (which even Israel is not).
Therefore - in summary - lets go to war with Iran.
Here is a really interesting article which balances various reports and is pretty well balanced with a hope for piece. Common Opinion of Various Reports: “A military Attack on Iran will be a Disaster”
Well 670 is looking to be a challenge. It's possible we'll have some retracement to 650s based on good geopolitical news. However, I think skirmishes will start in March for sure and price will continue in it's up trend.
I've also read that South African gold output fell last year by about 12-14% but not sure which site.
TWI
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Great thing about precious is the ETF holdings which only increase as the trend continues and all the little guys buy ETF stock. I hear there is good chance we see a Platinum etf soon, regs are a little harder to overcome there as not much of that stuff around and holding it in warehouses may be to detriment of industry and far more serious than silver or gold but with the right money people behind it , it will probably get through...first you hear of it being near is time to fully load up.
See China has been also been active buyer of gold recently. Good story, only downside is the spec long.
Looking at energy and copper specs are still short!!
See China has been also been active buyer of gold recently. Good story, only downside is the spec long.
Looking at energy and copper specs are still short!!
Atilla
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TWI said:
Here is another ace article on Gold...
With more interest rate hikes by the BoE and ECB and inflation under control according to the Fed, fundamentals are in tact for
Gold to rise
GBPUSD to rise
EURUSD to rise
On target for lift off...
Atilla
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Google Gold
Yet another interesting article on Gold and Google sprinkled with a touch of Silver...
Who would have thought?
Atilla said:
Yet another interesting article on Gold and Google sprinkled with a touch of Silver...
Who would have thought?
Atilla
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Article regarding the fundamentals facing the US economy. Even the PPT gets a mention.
Day of Judgement is dawning upon us.
Bonds are Forecasting a 2007 Recession
February 17th, 2007
Robert McHugh, Ph.D.
This doesn't mention any of the geopolitical threats facing the World economy either which I believe is one of the biggest factors fuelling rise in Gold.
Today on Bloomberg (an interesting debate between a bear and a bull) one analyst actually said Ben Bernanke "lied" in his testimony. That is a strong word. He continued saying it was his duty to hide difficulties and talk up the economy.
Not to mention the diversion on Friday's close with the rise in the Dow and fall in S&P & Nasdaq. Could the markets be confused?
The grumbling bellies of the bears grow ever louder not to mention the technical charts put forward re: Dow and S&P. What was due and failed to materialise in November is just round the corner in March imo.
Pooh bear, there there there... :!:
Day of Judgement is dawning upon us.
Bonds are Forecasting a 2007 Recession
February 17th, 2007
Robert McHugh, Ph.D.
This doesn't mention any of the geopolitical threats facing the World economy either which I believe is one of the biggest factors fuelling rise in Gold.
Today on Bloomberg (an interesting debate between a bear and a bull) one analyst actually said Ben Bernanke "lied" in his testimony. That is a strong word. He continued saying it was his duty to hide difficulties and talk up the economy.
Not to mention the diversion on Friday's close with the rise in the Dow and fall in S&P & Nasdaq. Could the markets be confused?
The grumbling bellies of the bears grow ever louder not to mention the technical charts put forward re: Dow and S&P. What was due and failed to materialise in November is just round the corner in March imo.
Pooh bear, there there there... :!:
Jack o'Clubs
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My only problem with the news and articles you keep posting Atilla (and by extension my problem with fundamental analysis), is that of estimating how much of the gloom'n'doom scenario is already discounted in gold prices. For sure some of it is, as none of this is stuff that the market is unaware of, whether you're talking about Middle East conflict or US recessions. I guess what you're saying is that you're far more pessimistic than the market seems to be, which is fair enough, but can you be sure what the market is thinking?
As the broker said to his goldbug client, "I've got good news and bad news. The bad news is that the gold price has halved over the last week. The good news is the fundamentals are unchanged and just as bullish".
FWIW, I'm long gold and silver here too (and somone I respect is also convinced that Bernanke and chums are basically making up the data to keep the US afloat), but just prefer to take my cues from the price action.
As the broker said to his goldbug client, "I've got good news and bad news. The bad news is that the gold price has halved over the last week. The good news is the fundamentals are unchanged and just as bullish".
FWIW, I'm long gold and silver here too (and somone I respect is also convinced that Bernanke and chums are basically making up the data to keep the US afloat), but just prefer to take my cues from the price action.
Atilla
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Jack o'Clubs said:
The price is all that matters.
I don't believe the market has factored in the outbreak of war with Iran as yet and so yes you can say I am more bearish on that front.
You can choose to ignore the news/noise... I prefer to listen to it as I feel in the event the eagles fly back to their nests and doves come out to play price of gold will drop considerably.
TWI
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I am long precious also but one thing worrying me is the high spec longs. It is getting close to where we were in May06.
I believe the case for gold but more due to continued dollar weakness and energy price strength in the current political uncertainty than market factors that look fundamentally neutral.
Definitely need to keep alert here and expect some fairly sharp sell-offs along the way to $700. Really would be far more comfortable if the specs were not yet so invested.
Same goes for the agriculturals at the moment but there the specs are really long , really very long....
I believe the case for gold but more due to continued dollar weakness and energy price strength in the current political uncertainty than market factors that look fundamentally neutral.
Definitely need to keep alert here and expect some fairly sharp sell-offs along the way to $700. Really would be far more comfortable if the specs were not yet so invested.
Same goes for the agriculturals at the moment but there the specs are really long , really very long....
Atilla
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TWI said:
The reason why the $ is weak is because of
1. US defecits + No change here we are in election year... bets on for long
2. war expenditure + Democrats factor - if Iran is attacked all bets on for long
3. weak economy. + inflation = Stagflation. all bets on for long
4. Move away from $ Some people can't see a non-$ era but it is dawning on us all
Bernanke said inflation will ease off as energy prices fall. King put the same arguement forward. However, factors 1 & 2 point to higher energy prices imo. Also, predicted growth in global economy points to high commodity prices.
I agree absolutely with the $ weakness, energy price and inflation factors but unless the underlying fundamentals which are 'S'ubstantial change then the only other likely event that will change the movement of gold is peace braking out in the Middle East.
imo we are at 670 and thought this would be a significant resistance level.
Just as 640 held and more recently 660. It's only a matter of time before 670 is breached and becomes a major support level post March.
Atilla
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TWI said:
Spot on TWI...
Gold Falls as Dollar Gain Erodes Appeal of Metal as Alternative
Here is an extract from the article regarding recent futures trading...
"Traders also sold the metal after a report from the U.S. Commodity Futures Trading Commission showed hedge-funds and other large speculators increased their net-long position in gold futures the week ended Feb. 13.
Speculative long positions, or bets prices will rise, outnumbered short positions by 124,750 contracts, the highest since May 2005, when gold reached a 26-year high of $732 an ounce.
``Positioning is at relatively extreme levels and we would not buy gold here and would rather wait for a correction to get long,'' Robin Bhar, an analyst at UBS AG in London, said in a report yesterday. "
What I'm not clear about is where is the strength in the $ coming from? Some banks may be buying $s perhaps? BoJ & ECB considering raising interest rates. BoE the jury is out so I don't understand the rise in the $.
