The gold price
Gold sinks, stocks rise - 3 January 2007
Global stock markets, meantime, continue to push higher to multi-year highs. The FTSE in London has risen yet again this morning. The Singapore market closed earlier at a fresh record high.
"It appears gold is running out of steam," says one US analyst. According to Bloomberg, he was a gold bull on Dec. 4 but had turned bearish by Christmas Day.
"I'm not going to have another buy signal until it closes decisively above $665," he says. "There isn't a reason to drive the market higher at this point.''
Investors who bought gold instead of stocks lost out as 2006 ended, Bloomberg goes on. Investor who sold $1 million of shares on Dec.1 and bought gold were down around $37,000 by New Year's Day.
"We have been disappointed with gold's movement,'' says Christoph Eibl, a fund manager at Tiberius Asset Management AG in Zug, Switzerland. He sold gold from his $700 million holdings in November. "The arguments were around for a higher gold price and it didn't perform."
Will Herr Eibl come to regret his haste? Global stocks may have beaten gold in December. They may well beat gold this month, too.
But can the bull market in paper assets really keep running and running? Click here to read our 2007 forecast now...
Adrian Ash runs the research desk at BullionVault, the physical gold and silver market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and is now a regular contributor to many leading analysis sites including Forbes and a regular guest on BBC national and international radio and television news. Adrian's views on the gold market have been sought by the Financial Times and Economist magazine in London; CNBC, Bloomberg and TheStreet.com in New York; Germany's Der Stern and FT Deutschland; Italy's Il Sole 24 Ore, and many other respected finance publications.
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