DAILY PRICES
Today’s Gold Prices: USD 1141.90, EUR 1012.23 and GBP 744.10 per ounce.
Yesterday’s Gold Prices: Bank Holiday in UK
Friday’s Gold Prices: USD 1,125.50, EUR 998.23 and GBP 730.99 per ounce.
(LBMA AM)
Gold was marginally higher yesterday and closed at $1135.50 per ounce, up $1.10. Silver was 0.3% higher and closed at $14.64 per ounce.
Gold rose 3.5% in August as stocks globally saw sharp falls on growing concerns about the Chinese and the global economy. Silver was 1% lower for the month of August and also acted as a hedge from falling stock markets globally.
Asset Performance in August – Finviz.com
Internationally, stocks had their worst month in the last three years. In one of the most volatile trading periods since the financial crisis, August saw $5.7 trillion erased from the value of stocks worldwide and no major stock market was left unscathed.
The S&P 500 was down a significant 6.3% and the Dow Jones Industrial Average ended the month 6.6% lower, while the Nasdaq was down 6.9%. At one stage losses were much higher but a sharp bounce toward the end of the month meant the declines were that as bad as they looked like they would be.
The weak performance of equity markets in August was mirrored across the world’s major financial centres, with the FTSE down 6.7%. The pan-European FTSEurofirst 300 index recorded a monthly loss of 9% – its worst monthly performance since August 2011.
Gold in USD – 30 days
Germany’s DAX was down 9% and posted its worst monthly performance since August 2011. The DAX is currently some 17% below a record high reached in April.
Asian stock markets closed their worst monthly performance in more than three years in August, as shares struggled to recover from a global selloff sparked by worries about China, the Fed and the global economy.
A slowdown in China’s economy, magnified by a surprise devaluation of the Chinese yuan earlier this month, accelerated a rout in Shanghai that spread across the globe, pushing down everything from stocks in the U.S. and Europe, to commodities and emerging market-currencies.
The Nikkei 225 down 8.2% – its biggest monthly decline since January 2014.
The Shanghai Composite Index ended down 12.5% , its third straight month of declines, and a close runner-up to July’s 14% loss, which was the index’s biggest monthly drop since August 2009.
India’s Sensex was down 6.5% in August.
The losses were broad-based as nine out of the 10 S&P sectors in the U.S. fell. Energy stocks were the sole gainers and interestingly oil prices have surged for a third straight day after the OPEC indicated they are prepared to discuss production levels. U.S. benchmark crude surged 8.8% to $49.20 a barrel on the New York Mercantile Exchange. Oil has surged 27% in just three days.
Today came further evidence of a global slowdown when factory gauges from France, Norway and Russia signaled contractions before data from the U.S. that economists predict will show slower growth
Gold served its function as a safe haven in August, rising strongly in the major currencies. Importantly, from a technical perspective gold recorded a monthly higher close which should see ‘trend following’ momentum traders and speculators begin to add to long positions and “to make the trend their friend”.
The ‘Fall’ and September and October can be the ‘cruelest’ months for stocks. Conversely, more years than not, precious metals prices perform well in September and the autumn period. Safe haven demand for bullion internationally remains robust and Indian festival seasonal demand looks set to be healthy as does Chinese New Year demand later in the autumn.
Given the very uncertain financial and economic outlook, it is important that investors remain diversified with healthy allocations to gold.
IMPORTANT NEWS
Gold Jumps 3.4% in August; US Mint Bullion Coins Impress – CoinNews.net
Gold regains shine in August amid market turmoil – Financial Times (registration required)
Oil’s Three Big Days Wipe Out a Month of Losses – Bloomberg
Gold Gains After China Factory Gauge Shrinks to Three-Year Low – Bloomberg
Asian shares slip as downbeat China PMIs revive growth fears – Reuters
IMPORTANT COMMENTARY
Breaking China could cripple us all – Davidmcwilliams.ie
Why a Fed Rate Hike Could Be a Blessing for Gold Prices: Brien Lundin – The Gold Report“Something” Just Happened! – Holter – GoldSeek.com
Gold standard isn’t as crazy as today’s central banking – The New York Sun
If China’s economy crashes, it will devastate the eurozone – and the UK – MoneyWeek
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