Thursday March 13, 2008

Gold hits $1000 an ounce for the first time in history

bloomberg.com :

Gold traded at $1,000 an ounce for the first time in New York as credit-market turmoil spurred demand for bullion as a haven from falling stocks and the dollar. April futures climbed as much as $19.50, or 2 percent, to $1,000 an ounce on the Comex division of the New York Mercantile Exchange.

Silver, platinum and palladium also advanced as the dollar fell below 100 yen for the first time since 1995 and to a record low against the euro. Carlyle Group's mortgage-bond fund moved a step closer to collapse. Gold climbed 19% this year in New York as the dollar fell and world equity markets declined.

Gold's all-time inflation adjusted record is $2,224 on Jan. 21, 1980. Prices in 1980 rose as high as $850 after U.S. inflation was running in the double digits and oil was climbing after a decade of Middle East instability. Assets in the StreetTracks Gold Trust, the biggest exchange- traded fund backed by gold, were unchanged yesterday at 652.5 metric tons, compared with the record 654.9 tons on March 10.

- 13 March 2008 will be remembered as a historic moment, where the price of gold crossed the magic $1000 mark for the first time. Similar to oil at $100, once it works through the $980-1000 consolidation range and vaults over $1000 and stays there, $1000 will transform from a resistance level to become a support level.

The next probable resistance levels are likely to be around $1100, $1300, $1500 and then $2000. Support levels are $950, $900, $850, and $800. Quite similar to the resistance and support levels for crude oil, I might add, if you multiply those by 10.

This is simply amazing. The US dollar is getting blown away left and right by all the major currencies, the euro, the yen, the yuan, and all the major commodities, crude oil, gold, silver, platinum, you name it.

See also :

1. US dollar sinks to new lows, gold price hits $955.70 all-time record, crude oil hits $101.43 record high
2. Gold and oil soar as inflation fears grow
3. Gold rises to record $949.20 as oil sparks demand for inflation hedge
4. Hyper-inflation : early warning signs

(2008-03-13 23:18:26 SGT) [Biz] Permalink

Crude oil hits $110.20 record on dollar fall

channelnewsasia.com :

Rocketing oil prices broke through 110 dollars per barrel for the first time in New York on Wednesday [12 Mar 2008] continuing a record run amid supply concerns and fevered market speculation. Traders said the ailing dollar also has also fuelled a spike in world oil prices because crude is priced in dollars and has become cheaper to buy for purchasers holding stronger currencies. New York's main oil futures contract, light sweet crude for delivery in April, ended up 1.17 dollars at a record closing high of 109.92 dollars per barrel after trading as high as 110.20 dollars. The US dollar meanwhile plunged to an all-time low against the euro following publication of strong eurozone industrial production figures.

bloomberg.com :

The dollar fell to the lowest since 1995 against the yen after U.S. President George W. Bush said the dollar is "adjusting". The dollar touched $1.5573 per euro, the weakest level since the European currency's 1999 debut. The US currency reached 101.10, the lowest since December 1995. The dollar also fell as firms from Citigroup to Goldman Sachs said yesterday [12 Mar 2008] the Federal Reserve's plan to inject $200 billion into the banking system may fail to break the freeze in money-market lending. Traders bet the Fed will cut its rate as much as 0.75 percentage point on March 18 to avert a recession.

Crude oil in New York touched $110.20 a barrel, the highest intraday price since the futures began trading in 1983. The US Dollar Index [USDX] traded on ICE Futures in New York, which compares the currency to those of six trading partners, declined to a record low of 72.20 yesterday.

- One of the Wall Street folks was quoted earlier as saying USDX 70 = $120 oil. I don't know how he came about this particular equation, but it just might come to that. We'll have to get into that $110-120 trading range first. It looks to me, even for an oil bull/dollar bear like myself, that we are getting way over-extended here. Could $120 be an intermediate resistance level for crude oil, and USDX 70 be interim support? We'll see.

Update : USDX just broke below 72. Looks like we're on our way to 70.

See also :

1. Crude oil reaches $109.72, breaks records for 5 days running on weak dollar
2. Crude oil hits $108.21 record as returns outpace stocks
3. Oil hits $105.97 record as dollar drops to all-time low
4. OPEC keeps output steady in face of $100 oil

(2008-03-13 13:46:21 SGT) [Energy] Permalink

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