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Sterling tumbles to 13-year low as economy’s woes raise prospect of historic rate cut
Bank expected to opt for reduction to 2%
The pound plunged yesterday, with its overall value tumbling to its lowest for 13 years, as another spate of dire economic news left markets convinced that the Bank of England will order a further, drastic cut in interest rates today.
Expectations that the Bank’s Monetary Policy Committee will cut rates by another full percentage point, and perhaps even repeat last month’s aggressive 1.5point reduction, leapt after a key survey suggested that the services sector, making up almost two-thirds of the economy, shrank at a record pace last month.
A further one-point drop in official base rates would take them to 2 per cent, a level last seen in 1951. A still more radical cut of 1.5 points, for a second month in a row, would leave the Bank in uncharted territory, pushing rates to their lowest in a history stretching back to 1694.
A rash of figures signalling that the economy is in the grip of a severe and accelerating slump has forced economists to amend forecasts of the MPC’s likely verdict today, and to predict that it is ready to take unprecedented action to stave off a recession worse than that of the early Nineties.
Almost two-thirds of City economists polled by Reuters this week are betting on a one-point rate cut today, amid warnings that the Bank could again wrong-foot markets with still more dramatic action.
“A one-point cut is now priced in across all markets. But there is a risk that the MPC will do more – and it would be very disappointing if they did less,” George Buckley, of Deutsche Bank, said.
Experts on The Times’ own MPC this morning reinforce pressure on the Bank to act boldly, with a call from a majority of the independent panel for a one-point cut.
Willem Buiter, a leading former member of the Bank’s rate-setting committee, called for it to go still further and cut interest rates to zero. “If zero is the floor, there’s no reason not to go there immediately,” he said.
In practice, most analysts expect the Bank to exercise greater caution, particularly as extreme rate cuts would leave it with no further ammunition to respond to grave economic news, while also piling pressure on the fragile pound, risking a sterling rout and a currency crisis.
Anxieties over the weakness of the pound were rekindled as it sank once again on foreign exchanges. The trade-weighted index of sterling’s overall value against a basket of currencies tumbled to 80.4, its lowest level since January 1996. The pound lost as much as 2.7 cents against the dollar, dropping to $1.4668. It has now fallen by more than 27 per cent against the dollar over the past 12 months, and by almost 20 per cent on the trade-weighted index.
Sterling is being battered as historic lows in UK interest rates, below those of the eurozone, reduce returns on cash deposited in Britain, cutting investor’s appetite for the currency. At the same time, markets are ever more fearful for the UK’s economic prospects.
Expectations of still deeper cuts in interest rates were heightened as the yield on gilt-edged government bonds plunged to record lows. Yields on benchmark 10-year gilts fell to 3.395 per cent, the lowest since records began 30 years ago, while those on two-year gilts fell to as little as 1.634 per cent.
Demands for the MPC to cut rates sharply were stoked by yesterday’s services survey, the gloomiest since it began in 1996. Scope for the Bank to cut rates was emphasised as the survey pointed to waning inflationary pressures, with services groups cutting prices for the first time in seven years
...
In reply to:
Where a Buck Stretches, Where It Doesn`t
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sambala
Nikkei edges higher, eyes on yen movements
TOKYO: Japan`s Nikkei average edged up 0.3 percent on Thursday, with drug firms such as Eisai Co Ltd strong as investors turned to domestic demand shares in the face of growing worry about the global economy.
Japan`s top refiner Nippon Oil Corp and sixth-ranked Nippon Mining Holdings Inc were untraded and awash with buy orders after they said they are considering a merger -- which would create the world`s eighth-largest oil major -- to better compete amid sliding prices and slower demand.
The benchmark Nikkei gained 26.31 points to 8,030.41, while the broader Topix rose 0.1 percent to 800.47.
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Nikkei edges higher, eyes on yen movements
TOKYO: Japan`s Nikkei average edged up 0.3 percent on Thursday, with drug firms such as Eisai Co Ltd strong as investors turned to domestic demand shares in the face of growing worry about the global economy.
Japan`s top refiner Nippon Oil Corp and sixth-ranked Nippon Mining Holdings Inc were untraded and awash with buy orders after they said they are considering a merger -- which would create the world`s eighth-largest oil major -- to better compete amid sliding prices and slower demand.
The benchmark Nikkei gained 26.31 points to 8,030.41, while the broader Topix rose 0.1 percent to 800.47.
...
In reply to:
Where a Buck Stretches, Where It Doesn`t
Posted by : sambala
1930s beggar-thy-neighbour fears as China devalues
China has begun to devalue the yuan for the first time in over a decade, raising fears that it will set off a 1930s-style race to the bottom and tip the global economy into an even deeper slump.
The central bank has shifted the central peg of its dollar band twice this week in a calculated move that suggests Beijing aims to offset the precipitous slide in Chinese manufacturing by trying to gain further export share abroad.
The futures markets are pricing in a 6pc devaluation over the next year. "This is clearly a big shift in policy and we are now on alert," said Simon Derrick, currency chief at the Bank of New York Mellon.
The move follows a Politburo speech by President Hu Jintao warning that China is "losing competitive edge in the world market".
China has allowed a crawling 20pc revaluation over the past three years. Any reversal risks setting off conflict with the incoming team of President-Elect Barack Obama in Washington. Mr Obama called China a "currency manipulator" during the campaign, a term that carries penalties under US trade law.
Outgoing US Treasury Secretary Hank Paulson is viewed as a "friend of China". He called for a stronger yuan this week before embarking on a visit to Beijing, but the plea was couched in friendly terms. This soft-peddling may soon change.
Hans Redeker, currency head at BNP Paribas, said China`s policy switch could set off a dangerous chain of events. "If they play this beggar-thy-neighbour game, it will cause a deflationary shock for the whole world," he said.
It makes sense for countries with current account deficits such as the UK, US or Turkey to let their currencies fall, but China has the world`s biggest trade surplus.
Michael Pettis, a professor at Beijing University, said it was "very worrying" that a pro-devalulation bloc seemed to be gaining the upper hand in the Communist Party. "I really do believe that we are on the brink of a very ugly period for trade relations," he said.
China has relied on exports to North America and Europe as its growth engine, making it acutely vulnerable to the contraction in global demand. Mr Pettis said this recalls the role played by the US in the 1920s, a parallel fraught with danger. "In the 1930s the US foolishly tried to dump capacity abroad, but the furious reaction of trading partners caused the strategy to misfire. China already seems to be in the process of engineering its own Smott-Hawley," he said, referring to the infamous US Tariff Act in 1930.
China showed restraint during the Asian crisis in 1998, holding the line against domino devaluations across the region. It may yet hold the line this time.
However, this crisis is more serious. The manufacturing sector has seen the steepest decline since the records began, with devastation sweeping the textile, furniture and toy sectors. Civil unrest has begun to rock the Guangdong and Longnan regions.
Beijing has slashed rates and unveiled a fiscal stimulus of 14pc of GDP, but most of the spending comes in the form of instructions to local governments to spend more – but without giving them the money. Does China really intend to step in to prop up global demand? The jury is out.
By Ambrose Evans-Pritchard
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Metal prices fall further than during Great Depression
The price of key industrial metals has fallen further over the last four months than occurred during the worst years of Great Depression between 1929 and 1933, according to research by Barclays Capital.
Kevin Norrish, the bank`s commodities strategist, said the average fall in the price of copper, lead, and zinc has been roughly 60pc since the peak in July this year. All three metals were traded on the London Metal Exchange in the inter-war years so it is possible to make a comparison.
Prices for the three metals fell 40pc from their highs in 1929 before touching bottom in 1933, with the bulk of the fall in 1930 as the slump spread worldwide. "Lead and zinc have already lost more than they did in the 1930s," he said.
Copper was hit hardest during the Depression, despite the electrification drive in the US and the Soviet Union, falling 70pc at one stage before creeping back in the mid-1930s. The reason was an 85pc fall in US construction, then the biggest user of the metal.
Barclays Capital said the broader equity markets are already discounting the sorts of "savage declines" in corporate profits that were last seen in the Slump. It said (trailing) price to earnings ratios are actually lower now than they were the early 1930s, with moves in credit spreads that suggest investors are anticipating depression-era levels of economic contraction.
The credit markets continued to exhibit signs of extreme stress yesterday. The iTraxx Crossover index measuring default risk on low-grade European bonds punched above 950 for the first time. The investment grade index hit 188. The spreads are now flashing the sort of danger signals seen before the collapse of Lehman Brothers in September.
Each episode of the financial crisis over the last eighteen months has been preceded by a big jump in the iTraxx indexes.
...
In reply to:
7 Trillion Reasons to Own Gold
Posted by : sambala
Gold may top $1,000 in 3 years
The prices of most commodities are likely to increase in the long run and for different reasons.
Gold may climb above $1,000 an ounce in 2011 as global mine output drops, mining costs rise and demand increases, Morgan Stanley said.
“Mining production actually peaked in 2001 and has since been declining,” the bank’s commodity analyst Hussein Allidina said in an interview with Bloomberg television in Singapore. “When I look at the demand side, as income growth accelerates, the consumption of gold for jewellery purposes increases.”
Gold more than doubled in the past six years and reached a record $1,032.70 an ounce March 17 as the dollar slumped and oil advanced, increasing concern inflation would accelerate. In the past eight months, the precious metal plunged 31 per cent as the dollar rallied, oil collapsed and the global credit crisis pushed the world toward a recession.
“The issue moving forward” now is deflation, said Allidina. “If you have got concerns about deflation you have lost that luster that gold has.” Gold for immediate delivery traded at $714.45 an ounce at 3:22 p.m. Singapore time today.
Agriculture commodities will be the least affected by slowing global growth compared with industrial metals and energy, and corn and soybeans are “oversold by far,” he said.
“When you think about it from a layman’s perspective, if your income is curtailed maybe you forego the purchase of a condominium or a car, you don’t really change your food consumption,” Allidina said. “You still have population growth and that always works in the favor of corn and soybeans.”
Price Spikes
Corn has plunged 54 per cent from a record $7.9925 June 27, and traded at $3.6675 a bushel at 3:23 p.m. Singapore time. Soybeans have tumbled 46 per cent from their peak July 3 and traded at $8.8725 a bushel.
Allidina said while he is cautious on base metals, “you don’t necessarily want to short any of these” as supply disruptions would probably cause a rally in prices.
“Inventory levels with the exception of aluminum are relatively tight,” he said. “They’ve improved over the last six to 12 months but if you pull back 10 years, inventories are much lower today than they were in other cycles.”
China announced a 4 trillion yuan ($586 billion) stimulus package Nov. 9 for spending on low-rent housing, infrastructure in rural areas, as well as roads, railways and airports.
“The plan is net positive but I don’t know if it will necessarily prevent a slowdown,” said Allidina. “Granted a lot of the copper used in China is in government-sponsored infrastructure, so that should continue, but the rest of the space is such a mess – auto sales, housing, it’s all down.”
Cash Costs
Most metals have fallen below their marginal cost of production and some are trading near their cash cost, which should limit the downside.
“If you look back historically for a full year you never average below the cash cost of production,” he said. “This time we’ll probably spend even less time below the cash cost because who’s going to loan you money if you’re cash negative.”
“Definitely capital expenditure for the future is being reduced,” he said. “That is why I am very concerned about what happens three years from now, because the same time that growth starts to recover is the time you don’t have the supply that we should be investing in today.” Oil is different from other commodities because of the issue of depletion.
“Next year it’s going to be a weaker scenario,” Allidina said. “I don’t believe we will go down to $30 or $40. You could see prices fall below $50 in the short term on a day to day basis, but I don’t think you will average in that range.”
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1930s beggar-thy-neighbour fears as China devalues
China has begun to devalue the yuan for the first time in over a decade, raising fears that it will set off a 1930s-style race to the bottom and tip the global economy into an even deeper slump.
The central bank has shifted the central peg of its dollar band twice this week in a calculated move that suggests Beijing aims to offset the precipitous slide in Chinese manufacturing by trying to gain further export share abroad.
The futures markets are pricing in a 6pc devaluation over the next year. "This is clearly a big shift in policy and we are now on alert," said Simon Derrick, currency chief at the Bank of New York Mellon.
The move follows a Politburo speech by President Hu Jintao warning that China is "losing competitive edge in the world market".
China has allowed a crawling 20pc revaluation over the past three years. Any reversal risks setting off conflict with the incoming team of President-Elect Barack Obama in Washington. Mr Obama called China a "currency manipulator" during the campaign, a term that carries penalties under US trade law.
Outgoing US Treasury Secretary Hank Paulson is viewed as a "friend of China". He called for a stronger yuan this week before embarking on a visit to Beijing, but the plea was couched in friendly terms. This soft-peddling may soon change.
Hans Redeker, currency head at BNP Paribas, said China`s policy switch could set off a dangerous chain of events. "If they play this beggar-thy-neighbour game, it will cause a deflationary shock for the whole world," he said.
It makes sense for countries with current account deficits such as the UK, US or Turkey to let their currencies fall, but China has the world`s biggest trade surplus.
Michael Pettis, a professor at Beijing University, said it was "very worrying" that a pro-devalulation bloc seemed to be gaining the upper hand in the Communist Party. "I really do believe that we are on the brink of a very ugly period for trade relations," he said.
China has relied on exports to North America and Europe as its growth engine, making it acutely vulnerable to the contraction in global demand. Mr Pettis said this recalls the role played by the US in the 1920s, a parallel fraught with danger. "In the 1930s the US foolishly tried to dump capacity abroad, but the furious reaction of trading partners caused the strategy to misfire. China already seems to be in the process of engineering its own Smott-Hawley," he said, referring to the infamous US Tariff Act in 1930.
China showed restraint during the Asian crisis in 1998, holding the line against domino devaluations across the region. It may yet hold the line this time.
However, this crisis is more serious. The manufacturing sector has seen the steepest decline since the records began, with devastation sweeping the textile, furniture and toy sectors. Civil unrest has begun to rock the Guangdong and Longnan regions.
Beijing has slashed rates and unveiled a fiscal stimulus of 14pc of GDP, but most of the spending comes in the form of instructions to local governments to spend more – but without giving them the money. Does China really intend to step in to prop up global demand? The jury is out.
By Ambrose Evans-Pritchard...
In reply to:
Where a Buck Stretches, Where It Doesn`t
Posted by : sambala
Why the dollar is getting stronger?
Investors have every reason to hate the US dollar. The rising deficit. The deteriorating economy. The plunging stock and bond markets. But rather than getting hammered by the financial crisis, the greenback is soaring. Since July the dollar is up 19% against the euro and 24% against the British pound.
Whether it’s a boon or a burden depends on perspective. US companies with huge exports aren’t thrilled, since a strong dollar hurts sales even as US consumers travelling to Paris will find their cash buys more than before.
What’s behind the dollar’s surprising strength? First, there’s the fear factor. During tough economic times, investors often flee foreign currencies and other risky assets for safe havens like the US dollar. The euro, the pound, and emerging-market currencies may also have been inflated after a six-year run-up.
A basket of foreign currencies rose 25% between 2002 and mid-2008 versus the dollar. The euro jumped 45%. But earlier this year some investors started betting the bubbles would burst, driving down the price of the currencies and conversely benefiting the dollar.
After its recent strong performance, the dollar is currently trading at about $1.28 to the euro, what some figure is a fair price based on the current buying power of consumers.
“When the stresses start to abate, people will be forced to think about whether they want to invest in the US,” says Thomas Stolper, an economist at Goldman Sachs. But if the global economy continues to sour, the dollar may rise even more.
The European currency markets may also feel the stress from the global slowdown. The euro zone lacks a strong central government that can adjust rapidly to crisis. For example, the ECB has been criticised for not recognising the severity of the crisis early enough: It raised interest rates in July before cutting them in October and November.
Says Stephen Jen, an economist at Morgan Stanley: “The dollar’s rise is genuine and more deserving than many sceptics have in mind.”
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Why the dollar is getting stronger?
Investors have every reason to hate the US dollar. The rising deficit. The deteriorating economy. The plunging stock and bond markets. But rather than getting hammered by the financial crisis, the greenback is soaring. Since July the dollar is up 19% against the euro and 24% against the British pound.
Whether it’s a boon or a burden depends on perspective. US companies with huge exports aren’t thrilled, since a strong dollar hurts sales even as US consumers travelling to Paris will find their cash buys more than before.
What’s behind the dollar’s surprising strength? First, there’s the fear factor. During tough economic times, investors often flee foreign currencies and other risky assets for safe havens like the US dollar. The euro, the pound, and emerging-market currencies may also have been inflated after a six-year run-up.
A basket of foreign currencies rose 25% between 2002 and mid-2008 versus the dollar. The euro jumped 45%. But earlier this year some investors started betting the bubbles would burst, driving down the price of the currencies and conversely benefiting the dollar.
After its recent strong performance, the dollar is currently trading at about $1.28 to the euro, what some figure is a fair price based on the current buying power of consumers.
“When the stresses start to abate, people will be forced to think about whether they want to invest in the US,” says Thomas Stolper, an economist at Goldman Sachs. But if the global economy continues to sour, the dollar may rise even more.
The European currency markets may also feel the stress from the global slowdown. The euro zone lacks a strong central government that can adjust rapidly to crisis. For example, the ECB has been criticised for not recognising the severity of the crisis early enough: It raised interest rates in July before cutting them in October and November.
Says Stephen Jen, an economist at Morgan Stanley: “The dollar’s rise is genuine and more deserving than many sceptics have in mind.”
...
In reply to:
Where a Buck Stretches, Where It Doesn`t
Posted by : sambala
Think your last grocery bill seemed pricey? Be happy that you don`t live in Sacramento, where a half-gallon of milk costs $2.97 on average. In fact, Sacramento`s milk prices rank the highest of any major metropolitan city in the country.
New York City is another pricey spot. Not only are the city`s average monthly mortgage, rent and energy bills the highest of any major city in the country, iceberg lettuce rings in at $2 per head, on average--double the price found in other cities
Sure, $2 isn`t going to bankrupt you, but as prices of everyday goods continue to rise and the economy continues to tank, seemingly small costs such as these begin to add up.
And things aren`t getting any better. Just last week, the government announced unemployment was at 6.5%. It hasn`t been this high in 14 years. No wonder consumer spending was down 0.3% in September, according to the Commerce Department.
As the economy continues its decline, those in San Antonio are far less likely to feel the pinch--at least when it comes to food prices. Residents there pay just $3.08 for an 11.5 oz. can of freeze-dried coffee, compared to $5.91 in San Francisco. And when it comes to bread, San Antonians win again: The average cost of a loaf of white bread is just $.79. In Manhattan, bread costs over three times that amount, at $2.68 per loaf.
Behind the Numbers
To determine the cities where everyday costs are the cheapest and most expensive, we turned to Council for Community and Economic Research, an Arlington, Va.-based organization that works with local government and research groups to determine the costs of common goods in metropolitan statistical areas across the country. C2ER provided the average price of 10 different everyday costs in the urban areas of the top 40 largest MSAs in the third quarter of 2008.
An urban area is defined as an area of 50,000 or more people within an MSA. That means "satellite cities"--smaller cities within the MSA--are separated from the larger cities in this survey. Take Boston. Although a small city like Quincy, Mass. is a part of Boston`s MSA, it was considered a separate city when compiling this research. Only Boston proper--which boasts an estimated 2008 population of 616,535--was included in the information offered about "Boston." Places like Brookline and Cambridge, which are also part of the overall Boston MSA, were not included.
But why are there such huge disparities across the country when it comes to everyday items? Sure, with its overpopulation and disproportionately high incomes, it makes sense that New York has the highest per-month mortgage rate, on average, or that Seattle--with its government-run energy supply--boasts the lowest monthly energy costs.
But what is it about San Antonio that keeps its food prices so low? Or New York`s energy costs so high?
Erol Yildirim, director of data products at C2ER, says that in the simplest terms, it has to do with supply and demand. In San Antonio, for example, the median household income was $36,214, according to the U.S. Census Bureau. In Manhattan, the median income per household is $47,030. "People who make less money demand less, which means suppliers can`t afford to charge more," says Yildirim.
Prices Rising Everywhere
Of course, there are seasonal, local and economic variables that factor in to the prices.
For example, the total rise in food costs over 2008 is expected to be 5% to 6% nationwide, according to the U.S. Department of Agriculture. That`s the biggest increase since 1990, which means we`re all, on average, paying more to eat than we were in 2007.
And on a microeconomic level, prices have a lot to do not only with personal income in specific areas, but with the health of the city`s very specific economic woes or triumphs. For example, part of the reason why many cities in California report high food prices has to do with the fact that energy and fuel costs in the region are high.
In Boston, a pair of denim jeans for boys cost $40, on average, in the third quarter of 2008. Why were they nearly three times more expensive there than in Indianapolis? There were fewer markdowns at the first city`s retailers, meaning the demand was higher and the economy was stronger. And while the median household income in Boston is $52,792, it`s just $40,051 in Indianapolis.
Unfortunately, as the economy worsens, this disparity between cheap and expensive isn`t going to go away.
It`s really a matter of the chicken or the egg: Workers in cities that provide a service or product that is in high demand need bigger salaries because costs are higher, and costs are higher because salaries are bigger. That`s a difficult-if not impossible-cycle to break.
If wages are higher to adjust to higher costs, then as long as the city/region can still produce a good or service that is in great demand elsewhere (e.g. finance in New York or software in Silicon Valley), then differences can certainly persist," says Dr.DB
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NEW YORK -- Crude-oil futures fell 4.7% Tuesday to close at the lowest level in more than three years as worries continued that a global economic slowdown will cut into energy demand.
Crude oil for January delivery ended down $2.32 to $46.96 a barrel on the New York Mercantile Exchange, the lowest closing level since May 20, 2005.
Crude`s loss on Tuesday followed a 9.4% slump in the previous session, the biggest percentage decline in more than seven weeks. Oil is now 68% lower than its record high of nearly $150 a barrel hit in July.
"Markets are increasingly concerned that the worldwide economic decline is too pronounced to be fixed any time soon and a worldwide recession will curtail energy demand," said analysts at Action Economics.
The U.S., the biggest oil consumer in the world, first entered a recession in December 2007, the National Bureau of Economic Research, which tracks economic cycles, said on Monday.
Oil demand could see an outright contraction of 0.5% next year as the global economy falls into recession, analysts at Merrill Lynch said in a report released late November.
Investors "cannot get over the weak global economic numbers," said Phil Flynn, vice president at Alaron Trading.
The U.S. Energy Information Administration is slated to report last week`s petroleum inventories data Wednesday. Analysts surveyed by energy information provider Platts expect a 2 million barrel buildup in crude stockpiles.
They also expect a 1.1 million barrels buildup in gasoline inventories and a 900,000 barrels increase in distillate stocks.
Last Wednesday the EIA reported U.S. crude inventories rose 7.3 million barrels in the week ended Nov. 21.
OPEC
The Organization of Petroleum Exporting Countries, which controls about 40% of the world`s oil production, ended a weekend meeting in Cairo without any decision on a production cut. The cartel will meet next on Dec. 17 in Oran, Algeria.
OPEC President and Algerian Oil Minister Chakib Khelil said he expects oil demand to decline from a month ago and said the group would take necessary action at the next meeting.
OPEC Secretary General Abdalla Salem El Badri said Monday that crude prices in the range of $70 to $90 a barrel would be "very reasonable."
"Incredibly, the grim global macro backdrop is not stopping various OPEC producers from throwing out `fair` numbers for their oil, with prices between $70 to $90 being bandied about," said Edward Meir, an analyst at MF Global, in a research note.
"The cartel would do well now to lower its sights to more realistic targets, and perhaps start thinking about living with $30-$40 oil," Meir said. "This is now a distinct possibility given the unprecedented global slowdown that has yet to fully manifest itself."
Also in energy trading, January reformulated gasoline dropped 4.8% to $1.0583 a gallon and January heating oil slid 2% to $1.5832 a gallon.
January natural-gas futures fell 2.7% to $6.424 per million British thermal units. ...
In reply to:
Do you think crude may slip below $ 45/bbl mark this month?
Posted by : sambala
Crude falls 4.7% as concerns over demand weigh
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Crude falls 4.7% as concerns over demand weigh...
In reply to:
Do you think crude may slip below $ 45/bbl mark this month?
Posted by : marketman
American auto majors closing their shops,japanese motor companies are in slump,europe in recesion,indian car/truck show rooms are empty.... more industries in lay off mood.... many people worldwide do not have money even to eat food.... speculators/funds not buying the oil futures due to heavy losses in recent times.... during the obama peiod there may not be any wars.... so,where is the demand for oil.... market will not be surprised even if crude comes down to 25 dollar per barrel in coming days....
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Dollar currently trading at Rs. 50.7. FIIs will continue to withdraw & at Rs. 54-55 per dollar it would see some stabilization. ...
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Gold has started its second leg of downtrend. Good to buy gold at USD 610-620 per ounce or At around closer to Rs. 10,000 per 10 gms. From that level bounce back of 15% could be seen before starting its 3rd leg of downtrend. So again sell it at USD 700 per ounce before starting of third leg of downtrend....
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Market what so ever have international event`s/sentiment`s impact. Any major event occurs in America/Europe but gives effect in India also. World has come closer. Recently events occured in Bombay has international impact and we all are depressed, why neighbour are not allow us to live peacefully. After globalisation every thing is possible....
In reply to:
Do you think crude may slip below $ 45/bbl mark this month?
Posted by : MMB Messenger
Dear Boarders,
Do let us know your views and opinions on the poll.
-MMB Messenger
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For Gold another downtrend has begun. Wait for it to touch Rs. 10,000-10500 per 10 gms. Gold will see cyclical range bound correction & lower side would be Rs. 8000 per 10 gms for medium to long term. However, long term gold bottom will be between Rs. 4200-Rs.6500. & it would remain range bound from Rs. 5000- Rs. 8000 for many years coming....
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Gold was a big mover for last week. It saw huge gain in just 2-4 session almost 16.5%. Gold saw rally from Rs.11400-Rs.13282 per 10 gms. I think the rally is overdone in anticipation that bailout packages will help gold to rise, but those packages are not for gold but for solving the subprime & financial mess.
I think another downside for gold will take it to Rs. 10000 per 10 gms in near to medium term. Exit Gold at this level....
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Book your profits in gold at around Rs. 13100-13200 per 10 gms level. Correction is yet to be seen in gold. All other asset classes are hugely attractive & cheap compared to gold which didn\\\`t see much correction. Gold medium to long term target is Rs. 8000-Rs. 8500 per 10 gms while long term target is quite much lower. It could remain range bound between 6000-8000 level. ...
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Yes. it would countinue its downtrend and there is every chance of getting it to touch .6 by Dec.2008....
In reply to:
Do you think crude may slip below $ 45/bbl mark this month?
Posted by : marketman
American auto majors closing their shops,japanese motor companies are in slump,europe in recesion,indian car/truck show rooms are empty.... more industries in lay off mood.... many people worldwide do not have money even to eat food.... speculators/funds not buying the oil futures due to heavy losses in recent times.... during the obama peiod there may not be any wars.... so,where is the demand for oil.... market will not be surprised even if crude comes down to 25 dollar per barrel in coming days....
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I see crude TRADING between 28 to 35$ in near future, and this price shall sustain for nearly 15-18 months, before there is any upwards movement. This price should be between January 15`2009 to February`15`2009...
In reply to:
Do you think crude may slip below $ 45/bbl mark this month?
Posted by : marketman
American auto majors closing their shops,japanese motor companies are in slump,europe in recesion,indian car/truck show rooms are empty.... more industries in lay off mood.... many people worldwide do not have money even to eat food.... speculators/funds not buying the oil futures due to heavy losses in recent times.... during the obama peiod there may not be any wars.... so,where is the demand for oil.... market will not be surprised even if crude comes down to 25 dollar per barrel in coming days....
