Is China dictating gold price?
Published on January 18, 2010 15:50:00 IST
By Kishori Krishnan
The figures speak for themselves. Gold is looking hesitant as it continues to correct its recent run to the upside.
Gold price suffered its worst day of 2010 as the price plunged $23.99 to $1,127.72 per ounce on January 12, on news of China’s central bank moving towards a tighter monetary policy.
Investors were warned, especially those tracking Goldinvestingnews, but some might have decided not to pay heed. In the bargain, they got their fingers burnt.
For all the Peter’s, the Paul’s and the Mark’s who were critical of this site ever getting it right, here is the proof of the pudding.
Gold mining stocks, as represented by the Market Vectors Gold Mining ETF (GDX), were the biggest losers on January 12, following the lower gold price.
Shares of these two Canadian gold mining companies and large components of the GDX, were trounced.
IAMGOLD (IAG) declined by 3.9 per cent.
Yamana Gold (AUY) declined by 3.5 per cent.
Meanwhile, Canada’s S&P/TSX Global Gold Index fell 3.0 per cent to 344.68.
Alongside gold’s plunge, copper suffered its largest decline in three months, off 10.5 cents to $333.50 per pound, and oil was lower by $1.82 to $80.70 per barrel, its biggest drop in five weeks.
Selling has led to more selling in commodities and equities as investors and traders liquidated positions.
And that is just the start.
Though news from China - where the People’s Bank of China (PBOC) unexpectedly announced a plan to increase the proportion of deposits banks must hold in reserves for the first time since 2008 - was an early trigger, it sent riskier asset classes, such as stocks and commodities lower.
And if the trend continues toward a tighter monetary policy and higher interest rates across the globe, the risk of a deeper correction in the gold price and gold mining stocks is only set to grow.
You have been tipped off. Once again.
Published on January 18, 2010 15:50:00 IST
By Kishori Krishnan
The figures speak for themselves. Gold is looking hesitant as it continues to correct its recent run to the upside.
Gold price suffered its worst day of 2010 as the price plunged $23.99 to $1,127.72 per ounce on January 12, on news of China’s central bank moving towards a tighter monetary policy.
Investors were warned, especially those tracking Goldinvestingnews, but some might have decided not to pay heed. In the bargain, they got their fingers burnt.
For all the Peter’s, the Paul’s and the Mark’s who were critical of this site ever getting it right, here is the proof of the pudding.
Gold mining stocks, as represented by the Market Vectors Gold Mining ETF (GDX), were the biggest losers on January 12, following the lower gold price.
Shares of these two Canadian gold mining companies and large components of the GDX, were trounced.
IAMGOLD (IAG) declined by 3.9 per cent.
Yamana Gold (AUY) declined by 3.5 per cent.
Meanwhile, Canada’s S&P/TSX Global Gold Index fell 3.0 per cent to 344.68.
Alongside gold’s plunge, copper suffered its largest decline in three months, off 10.5 cents to $333.50 per pound, and oil was lower by $1.82 to $80.70 per barrel, its biggest drop in five weeks.
Selling has led to more selling in commodities and equities as investors and traders liquidated positions.
And that is just the start.
Though news from China - where the People’s Bank of China (PBOC) unexpectedly announced a plan to increase the proportion of deposits banks must hold in reserves for the first time since 2008 - was an early trigger, it sent riskier asset classes, such as stocks and commodities lower.
And if the trend continues toward a tighter monetary policy and higher interest rates across the globe, the risk of a deeper correction in the gold price and gold mining stocks is only set to grow.
You have been tipped off. Once again.