GOLD BULLION rose against all major currencies Wednesday morning in London, trading above $1100 per ounce for the time in 7 sessions as world stock markets, industrial commodities, corporate bonds and non-US currencies all sank yet again.
Tracking New York’s late turnaround yesterday, Asian stock markets sank by 3%, with European equities losing the same by lunchtime.
In contrast to gold – now rallying over 5% from new 6-year lows at $1046 per ounce hit at the start of December – crude meantime hit new 12-years lows beneath $28 per barrel after the International Energy Agency warned yesterday that the worsening glut could see global oil markets “drown in oversupply”.
“How much longer do you think we’re going to see some of this production remain around before it’s forced to be taken out of the market?” asset-management giant BlackRock’s £2 billion mining fund boss Evy Hambro apparently demanded of commodities giant Glencore
(LON:GLEN) on a call last month, according to the Financial Times
GLEN lost another 5.6% on the London Stock Exchange today, extending the stock’s loss since floating in 2011 to more than 85%.
Silver prices also rose with gold bullion Wednesday, adding 1.5% from last weekend to touch $14.17 and matching the highest Dollar level of the last two weeks.
But with the largest exchange-traded gold trust vehicle
seeing investor interest unchanged Tuesday, the iShares Silver Trust (NYSEArca:SLV) shrank again, now shedding more than 300 tonnes since this time last month, equivalent to 12% of average monthly world mine output.
The giant SPDR Gold Trust in contrast (NYSEArca:GLD) has added 28 tonnes of bullion over the last month to back its growing number of shares in issue – equal to some 10% of average world monthly mine output.
“Gold will likely continue to benefit from safe haven status should equity weakness persist,” says an overnight Asian trading note from one bullion desk.
“The ability of gold to cut the bulk of [its recent] losses,” says a separate note from global investment and London bullion bank HSBC’s analyst James Steel, “[plus] the persistence of risk sentiment and comeback in the EUR-USD [exchange rate] leads us to continue to expect further gold gains.”