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August Review: Gold Rises 12% As Equities Fall, Commodities Mixed And German And US Bonds Higher

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From GoldCore

August Review: Gold Rises 12% as Equities Fall, Commodities Mixed and German and US Bonds Higher

Review of Precious Metals, Equities, Commodities, Bonds and Currencies

August was a very turbulent month for markets with equities falling sharply and commodities mixed on Eurozone and US sovereign debt concerns and concerns about the health of the US and global economy.

For many markets, Augusts’ savage sell-off has been the worst since the October following Lehman Brothers’ implosion and investors diversified into havens such as high credit government bonds and gold.

Gold again proved its safe haven status recording strong gains in the face of turbulent markets globally.

G10 Currencies and Precious Metals in US Dollars in August

Precious Metals

Gold’s London AM fix this morning was USD 1,815.50, EUR 1,270.73, GBP 1,118.95 per ounce. The gold fix was lower than yesterday’s AM Fix in dollars and pounds but higher in euros - USD 1,826.00, EUR 1,264.19, GBP 1,121.14 per ounce.

Gold is trading at USD 1,819.50, EUR 1,274.10 , GBP 1,121.30, CHF 1,455.50 and JPY 140,320 per ounce.

Silver is trading at USD 41.46, EUR 29.04 , GBP 25.56, CHF 33.16 and JPY 3,196 per ounce.

For the month, gold rose 12.8% in US dollar terms. Gold rose 12.1%, 13.0%, 12.2% and 14.6% in euros, British pounds, Japanese yen and in Swiss franc respectively.

For the month, silver rose 5.5% in US dollar terms and by similar amounts in other currencies.
 

 

Precious Metals in US Dollars in August

Equities

The MSCI All-Country World Index of stocks fell 7% as did the FTSE All World Stock Index.

In the US, the Dow Jones Industrial Average dropped 4.4% in August, its fourth consecutive month of declines. For the month, the broader S&P 500 fell 5.7%, also its fourth straight monthly loss.

In Europe, the benchmark Stoxx 600 fell 11%. The FTSE fell 7.4% and the Dax plunged over 20% (the ISEQ fell 8.6%).

In Asia, the MSCI Asia Pacific Index fell 9.8% in August. The Nikkei 225 (NKY) fell 8.9 percent in August. There was a dramatic rise in the level of concern about the U.S. economy resulting in falls of 2.9% for the Australian index to 11.9% for the South Korean index.

The much smaller fall in the MSCI world index again showed the benefits of global diversification.

Commodities

Commodities saw a very mixed performance.

The Standard & Poor’s GSCI Total Return Index of commodities lost 1.8%.

 Crude oil on the NYMEX fell 7.2% on US and global growth concerns. Copper fell 6.1% for similar reasons.

Economically sensitive nickel and zinc on the London Metal Exchange led the monthly declines on concern demand may weaken, declining 11% and 8% respectively.

Coffee was the biggest gainer in August, advancing 20%, the most since June 2010. Wheat advanced 11% as dry weather damaged the U.S. crop. Corn rallied 15% as the U.S. Department of Agriculture cut its estimate for the country’s crop, the world’s biggest.

Bonds

US Treasuries returned 2.8% while the global bond market gained 1.99% according to Bank of America Merrill Lynch index data.

German bunds also gained and the German bund yield fell more than 30 basis points over the month to yield 2.23%.

Periphery European nations bonds also saw gains after panic selling earlier in the month saw euro era record high interest rates.

Ireland’s 10-year yields declined 2.23% in August amid speculation that the nation may be able to grow its way out of its massive debt burden.

However, it is too early to tell whether the gains in the so called PIIGS debt markets are sustainable. The real risk is that the ECB intervention and bond buying programme may have merely bought more time and may ultimately lead to contagion in the Eurozone.

Currencies

The euro, the Danish krone, Japanese yen, Norwegian krone and the US dollar were the top performing G10 currencies in August (see ‘G10 Currencies and Precious Metals in US Dollars in August’ table above).

The worst performing currencies were the New Zealand dollar, Australian dollar, Canadian dollar and Swiss franc.

 

Cross Currency Table

All fiat currencies fell against gold and silver as global currency debasement continues.

For the latest news and commentary on financial markets and gold please follow us on Twitter

NEWS

(WSJ) -- PRECIOUS METALS: Gold Range-Bound In Asia As Risk Appetite Improves
http://online.wsj.com/article/BT-CO-20110901-701780.html

(Bloomberg) -- Silver Poised for ‘Golden Cross’ Advance to Record $50: GoldCore Technical Analysis
http://www.bloomberg.com/news/2011-09-01/silver-poised-for-golden-cross-advance-to-record-50-technical-analysis.html

(MarketWatch) -- Gold ends higher, gains 12% in August
http://www.marketwatch.com/story/gold-steady-after-retaking-1800-2011-08-31?dist=countdown

(Reuters) -- Gold steady after U.S. data; eyes on Fed
http://www.reuters.com/article/2011/09/01/us-markets-precious-idUSTRE7781Q420110901

(CNBC) -- Gold Rush Series Hits the Mother Lode: The GLD Vault
http://www.cnbc.com/id/44339966

(Reuters) -- Emerging central banks boost gold holdings in July
http://www.reuters.com/article/2011/08/31/gold-cenbanks-idUSL5E7JV18N20110831

COMMENTARY

(Casey Research) -- Behind the Scenes at GLD
http://www.caseyresearch.com/cdd/behind-scenes-gld

(ZeroHedge) -- Some Observations On Bob Pisani's Visit To GLD's Vault
http://www.zerohedge.com/news/some-observations-bob-pisanis-visit-glds-vault

(ZeroHedge) -- The Ever Diminishing Returns Of Central Bank Intervention, Or QE As
The Godfather Trilogy
http://www.zerohedge.com/news/ever-diminishing-returns-central-bank-intervention-or-qe-godfather-trilogy

(The Economic Collapse) -- 25 Signs That The Financial World Is About To Hit The Big Red Panic Button
http://theeconomiccollapseblog.com/archives/25-signs-that-the-financial-world-is-about-to-hit-the-big-red-panic-button

(Barron’s) -- Gold Gains 12% In August; Some Might Scoff, But Gartman Re-Enters Market
http://blogs.barrons.com/focusonfunds/2011/08/31/gold-gains-12-in-august-some-might-scoff-but-gartman-re-enters-market/?mod=BOLBlog

(MONEYWEB) -- Roubini Interview: Gold Price Becoming a Bubble – Advises Owning US & German Cash and Bonds
http://www.moneyweb.co.za/mw/view/mw/en/page292670?oid=551007&sn=2009+Detail

 


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Thu, 09/01/2011 - 07:20 | Link to Comment achmachat
achmachat's picture

This August I noticed that Palladium has become quite popular in China.

They buy it as jewellery. (really!)

According to these numbers, it didn't end up to be the best short-term investment.

Thu, 09/01/2011 - 07:26 | Link to Comment Sudden Debt
Sudden Debt's picture

Better stick to the most well known PM's. Gold & Silver, because once the lemmings will try to get in when it's to late, those 2 will go up to the moon first.

Once you can buy 1oz palladium for 1oz silver, it might be interesting to switch over.

 

Thu, 09/01/2011 - 07:28 | Link to Comment achmachat
achmachat's picture

I honestly think that Palladium got so popular over there because it sounds so exotic and "new"

Thu, 09/01/2011 - 07:32 | Link to Comment Sudden Debt
Sudden Debt's picture

I don't own any and never will.

Number 1: Silver

Number 2: Gold

 

Thu, 09/01/2011 - 08:35 | Link to Comment thunderchief
thunderchief's picture

That is because they are exotic.  Compared to Silver and Gold, above ground supplies of Platinum and Palladium are next to nothing.  Besides the fact that they are produced in such places like South Africa and Russia.

If I were to buy physical metal I would buy Palladium, Platinum, Silver and then Gold in that order. 

There is no sensible reason that Platinum should be at parity with Gold.

Thu, 09/01/2011 - 09:27 | Link to Comment malikai
malikai's picture

To me, platinum seems more industrial than PM. Sure, people like it because it's expensive and rare so it gets the precious part, but it's real value is in things like cat converters, fuel cells, etc. I think that's the business that will determine it's pricing fate.

Thu, 09/01/2011 - 12:50 | Link to Comment DosZap
DosZap's picture

malikiai @ 09:27,

Platinum is 82x's more rare than Gold,(if mem serves) this is why it's so expensive.

Also, there are a LOT of problems with the FEW producers, and miners globally....causing the prices to skyrocket.

Why Palladium is up, strictly on a chinese using it for jewelry is amazing to me, I can buy it at spot.or under. But, I won't NOW.

Thu, 09/01/2011 - 12:55 | Link to Comment DosZap
DosZap's picture

thunderchief, @08:35

There is no sensible reason that Platinum should be at parity with Gold.

yes there is, GOLD IS MONEY.

Plat is not.

Thu, 09/01/2011 - 16:23 | Link to Comment Freddie
Thu, 09/01/2011 - 13:04 | Link to Comment Smiddywesson
Smiddywesson's picture

There is no sensible reason that Platinum should be at parity with Gold.

Agreed, there is nothing sensible about fiat currency destruction.  However, there are some very logical reasons for gold reaching par with platimum. 

1.  Platinum is just a commodity, whereas gold is money. 

2.  The tiny platinum market can be wacked with a big old hammer and prices will stay down, whereas gold and silver love the hammer and keep on marching.

3.  Central banks are buying.  See #2

4.  I can walk into a coin shop anywhere in the country and walk out with fiat.  Not so with platinum.

5.  There is nothing sensible about gold operating as the only safe currency in a world dominated by paper, unless of course, that paper is about to lose its dominance.

 

Thu, 09/01/2011 - 12:22 | Link to Comment DosZap
DosZap's picture

achmachat @ 07:28,

Well, When it was $256.00oz, I thought about it, but was not really UP TO SNUFF n what it was, and what it's use was........so I passed and went Gold.

Bad mistake on my part.Could have picked a 100oz up for $26k, and by the end of this yr it's sposed to be $1k.

Right now could have sold at several points in the over $800.00 range.

Would have been an easy 50k.

In my whole life, keeping all emotions out of the deal, I KNOW if I go w/ my GUT, that little voice, I aways would come out ahead.

Sometimes I do not listen to it, and it has cost be a fortune.

Thu, 09/01/2011 - 13:13 | Link to Comment Smiddywesson
Smiddywesson's picture

Doszap has it the opposite of me.  I definitely don't take trades that my gut likes.  My gut is a liar.

On the other hand, it's an old trader maxim that the best trades are the ones you are least comfortable in.  Maybe that is because the public won't take, and stay in, those trades.  Since we know the public always loses, experiencing those feelings generally puts you on the side with the winners.  The big money doesn't make big money by fighting it out with each other, they want the public to cluster onto one side of the trade so they can jump in on the other side and run their stops.

Caveat:  I do pay attention to negative hunches and will close a trade based on gut feelings.  I know it contradicts what I just wrote, but you can't always put your finger on why something is wrong, you just know.  Live to fight another day.

Thu, 09/01/2011 - 09:01 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Main Stream Media "Murder Gold"... "WSJournal, NYTimes commentaries urge: Murder gold"

The manipulators are showing signs of cracking... Gold is scaring the bejesus out of them and their fiat schemes, and now their inner fears are spilling into their editorial commentary. Where before they attempted to appear as interested bystanders, now they are openly attacking gold ownership... calling for "U.S. Commodity Futures Trading Commission force commodity exchanges to raise margin requirements for gold trading to quash "speculation" in the monetary metal, and even "to limit the gold acquired individually and by the ETFs. All of these measures would have to be coordinated and put into effect on a global basis."  Good luck with that one, azz hats... You think the Chinese are going to go along with efforts to stop their citizens buying gold? Not.

Compliments of GATA, here are two vicious attacks on gold, one from the NYT, the other from WS Journal...

http://gata.org/node/10364

Thu, 09/01/2011 - 10:19 | Link to Comment Pegasus Muse
Pegasus Muse's picture

I took David Malpass' piece as a strong warning to the Fed about its evil money-printing ways:  (bolds mine)

"Mr. Bernanke should directly confront the fear index imbedded in high gold prices and low bond yields. Gold at more than $1,800 per ounce is a loud public statement of no confidence in our central bank. It means people would rather buy gold than hire workers or start businesses -- that they don't trust the central bank to maintain the value of their money." "Instead of locking in 2013 interest rates, as it has done, the Fed should reassure markets that sound monetary policy will produce lower gold prices and higher bond yields over time, an important step in restarting growth.

The status quo -- piling trillions into foreign countries, gold, and idle Treasury bonds -- sucks capital away from growth. The Fed should put an end to it."

 

The Davidoff (NYTimes) piece was nothing but a classic Wall Street "hit job" on gold. Complete crap.

"But like paper money, gold is worth only what people believe it is worth, and because of this, it is sometimes referred to as the barbarous relic. You can't eat gold. Its industrial uses are limited. If someone else doesn't assign the same value to gold that you do, you are out of luck. For those who predict it will be valuable if society completely collapses, guns and canned goods might come in handier."

"Gold's relative uselessness has helped spur talk of a bubble."

Thu, 09/01/2011 - 13:37 | Link to Comment Smiddywesson
Smiddywesson's picture

For those who predict it will be valuable if society completely collapses, guns and canned goods might come in handier."

The ignorance of these journalists is amazing. 

First:  Gold, guns, and canned goods are not mutually exclusive.  The fact that you can't live without one (food), doesn't render the others useless.  In fact, I would say that under chaotic conditions, all three are critical to your survival. 

Second:  Gold reaches its MAXIMUM usefulness exactly when this idiot journalist implies it losses its usefulness.  If society completely collapses, gold becomes a critical means of survival.  Davidoff apparently forgot that life becomes cheap in such times, and there were plenty of Jews who survived the Nazis because they had gold and other hard valuables to buy their way out.  When Rome fell, there weren't a bunch of Goths swarming into town to steal their fiat, they wanted gold. 

Davidoff says, "like paper money, gold is only worth what people believe it is worth."  Wrong.  Paper fluctuates down to zero, gold never has and never will.  Just because gold prices fluctuate in our fiat based world (I would differ with this and say fiat fluctuates more than gold itself) Davidoff equates a worthless IOU to a hard asset.  What a dope.    

Thu, 09/01/2011 - 12:33 | Link to Comment DosZap
DosZap's picture

Snidley, @ 09:01,

I had to laugh at an article (could not believe it was MSM saying it), that their exact words were,

Well, it appears The GOLD BUGS WERE RIGHT...........................BIG headlines.

All these years of being biatch slapped and called doomers, etc,etc,etc...................VINDICATION!!!!!!!!!!!!!!

Felt GOOD.

Thu, 09/01/2011 - 13:21 | Link to Comment Smiddywesson
Smiddywesson's picture

August changed everything.  You can't manipulate to this extent and not show your hand.  You can't say banks hold gold due to simple tradition and not raise eyebrows.  You can't raise margins without people wondering why.  You can't call for a legal ban on ownership and claim with any credibility that gold is just a commodity.

Yes, the facad of the lies they have created is cracking fast.

My answer to these articles is a question.  Exactly who is being hurt by all this wild speculation?  If it were coffee, or copper, they could come up with some sort of argument and spin it with a sad tale about all the coffee drinkers who are being cheated, or how the high prices of copper are stifling the Summer of Recovery III.  But who is getting hurt by high gold prices?  TPTB are being hurt, because they are buying it.  And now everyone is becoming aware of that fact.

Thu, 09/01/2011 - 16:30 | Link to Comment Freddie
Freddie's picture

The Wall Street Journal?barrons/Murdoch/Al Waleed/Saudi Arabia is a joke now.  They fawn over the con artist buffett.  Make excuses for Obama as well.  

Thu, 09/01/2011 - 07:24 | Link to Comment oobrien
oobrien's picture

We might be screwed.

But let's go out singing.

Living in a trailer ain't all that bad.

Fuck Ben Bernanke.

And fuck the horse he rode in on.

http://geraldcelente.proboards.com

Thu, 09/01/2011 - 07:41 | Link to Comment oobrien
oobrien's picture

Brothers and sisters,

Fuck it all in the ass!

Food stamps for everybody!

Let's sing the Ben Bernanke song:

http://www.geraldcelente.proboards.com/index.cgi?board=music&action=display&thread=320

Thu, 09/01/2011 - 07:45 | Link to Comment spankfish
spankfish's picture

I wonder is Angel Merkel knows this line from the Panzer Lied... Für Deutschland zu sterben ist uns höchste Ehr'

Thu, 09/01/2011 - 08:21 | Link to Comment lovesmoney
Thu, 09/01/2011 - 08:31 | Link to Comment GuyJeans
GuyJeans's picture

"All fiat currencies fell against gold and silver as global currency debasement continues."

 

Seems that most Japanese dont get that statement.  A news station in Tokyo today showed lines at Tanaka Ginza for people selling their gold. 

Last month when we had that spike in the yen there were people lining up selling.  My wife and inlaws keep saying "isnt it a bubble?" but they dont get that Japan gov is a one trick pony. 

Thu, 09/01/2011 - 10:16 | Link to Comment tekhneek
tekhneek's picture

Gotta hand it to the MSM. They're making a lot of people rich as fuck right now with that 90% spot discount.

Thu, 09/01/2011 - 12:28 | Link to Comment DosZap
DosZap's picture

Guy,08:31

I saw that early in the week, they were in LINES selling an avg of 1.34B a DAY in their Gold holding in Japan, teeth, whatever you name it.The article said SO many prople were selling they had to turn away many.Posted a link here.

Could not believe what I was reading.......not from the Japanese anyway.

Thu, 09/01/2011 - 08:42 | Link to Comment Smiddywesson
Smiddywesson's picture

What happened in August was a complete repudiation of the "Gold is a bubble" mantra.

Bubbles don't go parabolic, crash, and return to the trend

Bubbles don't survive margin increases that smack prices down

Bubbles don't shake off price manipulation in the premarket and blatant manipulation during the trading day.

Gold has replaced the USD as the go to trade when TSHTF.  In 2008, everybody swarmed into the USD and treasuries, in 2011 it was gold and treasuries. 

Bubbles don't recover.  Bubbles pop and then lay on the floor with their thumbs in their mouthes.  The manipulators of price used up a precious margin increase, but worse from their perspective, made it painfully obvious to all market observers what they are doing.  Now even CNBC is featuring guests discussing gold and the return to a gold standard.  The fact of a run in gold prices was known to the public, but now the reason for that price increase is seeping into their consciousness.  August was an epic fail for central banks trying to hold down gold prices.  August changed everything.   

TWO WORD AUGUST REVIEW: 

VINDICATION BITCHEZ!!!!!

Thu, 09/01/2011 - 09:19 | Link to Comment Bullionaire
Bullionaire's picture

Your daily "negative JPM:SILVER" update - unless The Cartel succeeds in jamming silver down at least $4, enjoy Day 31.

 

That's over a month now, Blythe.

 

Suck it harder, baby.  Yeaaaaaaaaaah.

 

 

Thu, 09/01/2011 - 10:47 | Link to Comment Grand Supercycle
Grand Supercycle's picture

S&P500 big picture remains bearish and this will ALWAYS exert the most influence. The only thing GUARANTEED is that the bearish medium/long term cycle will have the upper hand.

FX medium to long term outlook continues: Euro bearish and USD bullish.

As mentioned many times - bring on the OVERDUE USD rally.

IMPORTANT CHART HERE.
http://stockmarket618.wordpress.com

Thu, 09/01/2011 - 12:45 | Link to Comment DosZap
DosZap's picture

Main Stream Media "Murder Gold"... "WSJournal, NY Times commentaries urge: Murder gold"

Sure, the sorry bstds do not want the LITTLE people wielding any POWER.

The Puppeteers know this, and pull these ass hats strings like Howdy Doody.

Screw them all.I am sick of JUST A select few, screwing us into the ground,and the BOOT ON OUR NECKS is coming off.

Financial independence is something they cannot allow.

Thu, 09/01/2011 - 12:53 | Link to Comment DosZap
DosZap's picture

They are SITTING on Silver like a GIANT............................

I refuse to buy it, because they can take it down, and keep it down.Not so w/Gold.

Thu, 09/01/2011 - 13:46 | Link to Comment Smiddywesson
Smiddywesson's picture

Actually, I own both.  I don't expect any appreciable profit in my silver until the kick the can game is at an end.  That's when I believe they will engage in panic buying of gold and announce a gold standard (of sorts).  That will ramp the price of gold.  At that time, they won't have any reason to continue to suppress silver prices.  They can't hold gold prices down completely because they are buying, but silver, they have shown they can hold it down.  I'm not a silver hater (I'm a holder) it's just that I don't think we will get our cheese before we reach the end of the maze.

Mon, 09/05/2011 - 09:00 | Link to Comment shacai
shacai's picture

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