Wednesday, October 18, 2006
Higher Oil Or Dollar Bears For Gold Rally
The Associated Press has some currency news. "The dollar gained a little ground against the euro Wednesday following a new round of inflation data and an unexpected rise in housing construction. The euro bought US$1.2524, down from US$1.2546 in New York late Tuesday. The British pound fell to US$1.8674 from US$1.8704."
"The dollar edged up to 118.99 Japanese yen from 118.89 yen. Earlier in the day, it had fallen after a newspaper report suggested that the Bank of Japan is concerned about the national currency's recent weakness."
"Some yen buying was seen overnight after a report emerged that Bank of Japan is concerned with the impact of yen carry trades on the yen and short-term Japanese interest rates. Yen carry trades involve the sale of yen to invest in higher-yielding assets and can create more volatility when traders scramble to cover their short yen positions. One factor that may keep the yen on the defensive is a potential second nuclear test by North Korea."
"The Japanese yen made gains early against the US dollar and the euro on Wednesday after newspaper reports implied that the Bank of Japan is getting ready to increase its scrutiny of carry trades. The gains were lost later in the session, however, when the Bank denied that it would watch the trades more carefully or in any new ways."
"Gold fell in New York for the second straight day after a drop in oil prices reduced the metal's appeal as a hedge against inflation. The price of gold has followed oil this year. The metal has fallen 19 percent from a 26-year high, partly as oil shed 26 percent from a record in July."
"'Gold is really following the crude market,' said Michael Guido, director of hedge-fund marketing at Societe Generale in New York. 'A fall below $58 could drag gold down further.' 'One of the biggest threats to commodities is the flow of money into equities,' Guido said. 'That could strip money from the gold market.'"
"Gold for December delivery closed down 90 cents at $592.60 an ounce on the New York Mercantile Exchange, after rising as high as $598. The contract, which lost $5 on Tuesday, hasn't touched $600 since Oct. 2. December silver rose by 4 cents to close at $11.82 an ounce, following a loss of 20 cents in the previous session."
"'Resistance has proved extremely strong ahead of $600 and the market is likely to need either oil to make a substantial move back above $60/barrel, or the return of dollar bears before this can be achieved,' said James Moore, an analyst at TheBullionDesk.com. For now, 'rallies will continue to be used as selling opportunities with resistance seen from $600 to $608, which is my upside breakout level,' he said."
"January platinum added $10.10 to close at $1,093.10 and December palladium rose $12.90 to end at $332.50 an ounce."
"The dollar edged up to 118.99 Japanese yen from 118.89 yen. Earlier in the day, it had fallen after a newspaper report suggested that the Bank of Japan is concerned about the national currency's recent weakness."
"Some yen buying was seen overnight after a report emerged that Bank of Japan is concerned with the impact of yen carry trades on the yen and short-term Japanese interest rates. Yen carry trades involve the sale of yen to invest in higher-yielding assets and can create more volatility when traders scramble to cover their short yen positions. One factor that may keep the yen on the defensive is a potential second nuclear test by North Korea."
"The Japanese yen made gains early against the US dollar and the euro on Wednesday after newspaper reports implied that the Bank of Japan is getting ready to increase its scrutiny of carry trades. The gains were lost later in the session, however, when the Bank denied that it would watch the trades more carefully or in any new ways."
"Gold fell in New York for the second straight day after a drop in oil prices reduced the metal's appeal as a hedge against inflation. The price of gold has followed oil this year. The metal has fallen 19 percent from a 26-year high, partly as oil shed 26 percent from a record in July."
"'Gold is really following the crude market,' said Michael Guido, director of hedge-fund marketing at Societe Generale in New York. 'A fall below $58 could drag gold down further.' 'One of the biggest threats to commodities is the flow of money into equities,' Guido said. 'That could strip money from the gold market.'"
"Gold for December delivery closed down 90 cents at $592.60 an ounce on the New York Mercantile Exchange, after rising as high as $598. The contract, which lost $5 on Tuesday, hasn't touched $600 since Oct. 2. December silver rose by 4 cents to close at $11.82 an ounce, following a loss of 20 cents in the previous session."
"'Resistance has proved extremely strong ahead of $600 and the market is likely to need either oil to make a substantial move back above $60/barrel, or the return of dollar bears before this can be achieved,' said James Moore, an analyst at TheBullionDesk.com. For now, 'rallies will continue to be used as selling opportunities with resistance seen from $600 to $608, which is my upside breakout level,' he said."
"January platinum added $10.10 to close at $1,093.10 and December palladium rose $12.90 to end at $332.50 an ounce."
# posted by Ben Jones @ 2:46 PM 
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I agree. I wish there were a way to get some of the more interesting discussions from HB to here. I get tired of wading through so much of the silliness over there to get to the red meat.
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