As the old saying goes, “It’s hitting the fan.” In the wake of the U.S. housing bust, the dollar is struggling against major world currencies. And every time the government tries to rescue lenders or borrowers, it just makes the dollar panic that much worse.
After pouring tens of billions of dollars directly into the mortgage markets and then slashing the Fed’s discount rate, the government has launched an all-out assault on the rapidly spreading housing and mortgage catastrophe.
First, President Bush announced that Washington is about to throw yet more money at the credit crunch with massive spending initiatives to help at-risk mortgage holders keep their homes.
On the very same day in Jackson Hole, Wyoming, Bush’s hand-picked Fed Chief, Ben Bernanke, said in public what he’s only been admitting to congressmen behind closed doors: That the Fed will do whatever it takes to bail out failing financial institutions.
English translation: “We’ll throw billions ... tens of billions ... even hundreds of billions of newly-printed paper dollars at this crisis if that’s what it takes to bail out irresponsible borrowers and lenders.”
Does Bernanke know what that means? Does he understand that every new paper dollar he throws into the economy reduces the value of every other dollar in circulation?
Does he know that by devaluing the dollar he is, in effect, robbing you of purchasing power and making every investment you own worthless?
Of course he does. Bernanke graduated from Harvard summa cum laude with a B.A. in economics. He has a Ph.D. in economics from the Massachusetts Institute of Technology (M.I.T.). And before he joined the Fed, Bernanke was Professor and Chair of the Economics Department at Princeton.
Bernanke understands the basics of supply and demand. He knows that by throwing billions of unbacked paper dollars at the credit crunch, he’s devaluing the U.S. dollar.
But does he care that he’s destroying your buying power, the value of your investments and putting your retirement at risk? Maybe… maybe not.
But one thing is for sure: He is far more terrified of what will happen if he does not avert the vicious cycle of home price declines and foreclosures now sweeping across the country. That’s why we have come to such a critical crossroads for every single financial decision you could possibly make.
That’s why it’s so essential that you register for our first ever online Emergency Video Summit presented by one of the country’s foremost experts on protecting your money, Martin D. Weiss.
Martin Weiss, chairman of The Weiss Research Group, is one of the nation's leading providers of a wide range of investment information.
Dr. Weiss began his career in 1971 when he founded Weiss Research, dedicated to evaluating the safety of financial institutions and investments for consulting clients. In 1980 Dr. Weiss began issuing formal safety ratings on banks and savings institutions. His firm issued the first independent insurance ratings in 1989, the first ratings of brokerage firms in 1992, and the first HMO ratings in 1994.
Dr. Weiss has appeared on ABC, CBS, NBC, CNBC, and network news programs, including The Today Show. He has been quoted in hundreds of newspapers and magazines, including The Wall Street Journal, USA Today, The New York Times, The Chicago Tribune, The Los Angeles Times, Esquire Magazine, Money, Business Week, Fortune, and The Institutional Investor.
Martin Weiss has teamed together with noted currency expert Jack Crooks, of Crooks Currency Service, to bring you this Free Video Summit: The Great Dollar Panic of 2007-2008: Urgent Self-Defense and Massive Profit Opportunities.
My friends, what you are witnessing today is not just a housing bust, but also a mortgage meltdown. Not just a mortgage meltdown, but also a credit crunch. Not just a credit crunch, but also a dollar panic.
This is why you need self-defense so urgently. In this action-packed hour, world currency expert Jack Crooks will give you new proof that this mushrooming mortgage meltdown and credit crisis now threatens every dollar you earn, save and invest — and how it’s destroying your buying power, your investment potential and even your chances of a secure retirement.
Plus, for the first time ever, Jack will explain why he’s convinced that as the U.S. dollar plummets, the greatest profit opportunity in years is now taking shape on the other side of the planet.
Sunday, October 14, 2007
Hard Assets, Financial Markets, Risk/Reward Ratio: Where To Invest?
Lee Quaintance and Paul Brodsky of QB Partners are concerned about runaway monetary inflation and the decline of the U.S. dollar.
In this week's Barron's Up and Down Wall Street, they address the question "Where to invest when the financial markets seem unduly risky and the risk/reward ratio generally unfavorable?"
"The answer, they believe, is that hard assets will provide more profits and carry less risk than most financial assets. And that since most "hard-asset derivatives (equity) remain unpopular among financial-market investors," they provide intriguing investment potential.
To illustrate, even with oil at record high prices above $80 a barrel, "energy-related public equities continue to be valued on implied assumptions of long-term crude prices of no more than $45 a barrel."
In like vein, they note that the equity-market valuations of certain global agricultural, precious and industrial metals, and mineral concerns are trading at a fraction of their future production/reserve values. Lee and Paul allow as there are valid reasons why such shares sell below their optimum value, but the discounting is typically much too severe.
Basically, their view is that "investors have not begun to allocate to these sectors en masse because we think they have yet to recognize the relationship linking money creation (and fiat currency declines) to the intrinsic value of natural resources."
They go on to explain that "most stocks that derive their value from natural resources are cheap because most investors that could sponsor such plays haven't done so in 30 years." But the pros will be forced to change that stance when economic fundamentals give them no choice. And, in due course, they'll be followed by the investment masses, who, as always, will be late to the party."
I couldn't agree more.
One last item of concern: Moral Hazard. Quaintance and Brodsky note that "financial-asset markets are not set up to anticipate economic downturns, since it seems that Big Brother is always there to bail them out."
I suspect Ben Bernanke is all too aware of this, and was part of his calculus last month, despite the 50 bp cut. Indeed, it may be part of what's weighing against a cut in the October meeting..
In this week's Barron's Up and Down Wall Street, they address the question "Where to invest when the financial markets seem unduly risky and the risk/reward ratio generally unfavorable?"
"The answer, they believe, is that hard assets will provide more profits and carry less risk than most financial assets. And that since most "hard-asset derivatives (equity) remain unpopular among financial-market investors," they provide intriguing investment potential.
To illustrate, even with oil at record high prices above $80 a barrel, "energy-related public equities continue to be valued on implied assumptions of long-term crude prices of no more than $45 a barrel."
In like vein, they note that the equity-market valuations of certain global agricultural, precious and industrial metals, and mineral concerns are trading at a fraction of their future production/reserve values. Lee and Paul allow as there are valid reasons why such shares sell below their optimum value, but the discounting is typically much too severe.
Basically, their view is that "investors have not begun to allocate to these sectors en masse because we think they have yet to recognize the relationship linking money creation (and fiat currency declines) to the intrinsic value of natural resources."
They go on to explain that "most stocks that derive their value from natural resources are cheap because most investors that could sponsor such plays haven't done so in 30 years." But the pros will be forced to change that stance when economic fundamentals give them no choice. And, in due course, they'll be followed by the investment masses, who, as always, will be late to the party."
I couldn't agree more.
One last item of concern: Moral Hazard. Quaintance and Brodsky note that "financial-asset markets are not set up to anticipate economic downturns, since it seems that Big Brother is always there to bail them out."
I suspect Ben Bernanke is all too aware of this, and was part of his calculus last month, despite the 50 bp cut. Indeed, it may be part of what's weighing against a cut in the October meeting..
Speculation likely to take crude to $100
Dubai: Consumers worldwide will have to come to terms with a $100 per barrel oil price sooner than expected and adjust their earnings and savings accordingly to cope with it, according to global forecasts.
The oil price crossed $84 a barrel on Friday, on Iraq-Turkey tensions.
Analysts warned the high price is going to take its toll on consumers already feeling the pinch.
Although global oil demand remains virtually unchanged at 85.9 million barrels per day (mb/d) as per current figures to 88mb/d in 2008, the tendency of speculators to push up prices on any pretext needs to be addressed, analysts said.
The oil price crossed $84 a barrel on Friday, on Iraq-Turkey tensions.
Analysts warned the high price is going to take its toll on consumers already feeling the pinch.
Although global oil demand remains virtually unchanged at 85.9 million barrels per day (mb/d) as per current figures to 88mb/d in 2008, the tendency of speculators to push up prices on any pretext needs to be addressed, analysts said.
Oil product exports from India to soar
New Delhi: Exports of petroleum products from India are likely to reach $497.01 billion within the next five years, said a study by industry body Assocham. It said exports of petroleum products are growing at a faster rate than imports.
Petroleum products exported by India have been growing at an astonishing rate of 73 per cent for the past three years, according to Petroleum Trade, a study done by Associated Chambers of Commerce and Industry of India (Assocham).
"Petroleum exports were valued at $0.03 billion in 1999-2000, which increased to $18.53 billion in fiscal 2006-07, growing at a compound annual rate of 96.5 per cent. Imports on the other hand, increased from $12.6 billion in 1999-2000 to $57 billion in 2006-07," Assocham president Venugopal Dhoot said in a statement.
Momentum
"Even as energy requirements of Indian economy are rapidly increasing, capacity expansion of public- and private-sector refineries would help maintain the growth momentum of exports of petroleum products," he added.
The study also indicated that the growth rate of petroleum imports had been declining over the past two years.
Petroleum products exported by India have been growing at an astonishing rate of 73 per cent for the past three years, according to Petroleum Trade, a study done by Associated Chambers of Commerce and Industry of India (Assocham).
"Petroleum exports were valued at $0.03 billion in 1999-2000, which increased to $18.53 billion in fiscal 2006-07, growing at a compound annual rate of 96.5 per cent. Imports on the other hand, increased from $12.6 billion in 1999-2000 to $57 billion in 2006-07," Assocham president Venugopal Dhoot said in a statement.
Momentum
"Even as energy requirements of Indian economy are rapidly increasing, capacity expansion of public- and private-sector refineries would help maintain the growth momentum of exports of petroleum products," he added.
The study also indicated that the growth rate of petroleum imports had been declining over the past two years.
Large pension funds stick to commodities
Large pension funds say they are sticking to commodity indices to diversify portfolio risks and because they offer better protection against inflation than hedge funds.
Big losses for pension funds in indices such as the S&P Goldman Sachs Commodity Index - down about 15 per cent last year - has fuelled debate about whether investors should be looking at more actively managed portfolios.
"We are looking for a stable portfolio with a desired rate of return ... Our allocation is for the long run," Frans De Wit, a senior investment manager at PGGM, told the Commodities Week conference last week.
His is the second largest Dutch pension fund with 86 billion euros ($121.9 billion) under management.
"If you are looking for high returns then you shouldn't be invested in an index," he said. PGGM has four per cent of its assets in commodities.
Commodities have a negative correlation to stocks and bonds and so are ideal for pension funds, which after the 2000 equity market crash decimated their portfolios have been looking for ways to minimise the risks of large losses.
Many investors have opted for the S&P GSCI because about 70 per cent of its allocation is to energy. That makes it a good hedge against inflation, which erodes corporate earnings.
Inflation typically also means higher interest rates, which often leads to lower prices of government and corporate bonds.
Forays
"(Commodity indices) provide diversification and a negative correlation with most of the assets we hold," said Helene Winch, associate director at UK-based Hermes Pensions Management with £68 billion under management.
Hermes has £1 billion invested in a basket of commodities.
The decision to stay with indices may be vindicated by index performance this year. The S&P GSCI gained more than 18 per cent in the nine months to end-September, while US benchmark the S&P 500 managed about seven per cent.
Investment products based on indices including the S&P GSCI, the Dow Jones AIG, are estimated to manage around $100 billion. Commodity hedge funds are growing, but the amount of money they manage is still a fraction of index money.
Hedge funds often specialise in metals, agricultural commodities or related equities, Some are involved in transport and others are making forays into physical markets.
"It's a different kind of exposure," said Catherine Claydon, a managing director in the pensions advisory group at investment bank Lehman Brothers.
Also a problem is the fact that most commodity hedge funds are small and do not have capacity to manage successfully the large amounts of money pension funds need to allocate.
That, Winch said, raises liquidity issues.
"Trying to find a home for $2 billion ... would be tricky," she said. "If a hedge fund is investing in commodity linked equities, that's what we have (already) and that's what we don't want."
Most indices also have specific allocations to sectors, so if the value of one sector rises then the allocation has to be rebalanced to meet the benchmark criteria.
Big losses for pension funds in indices such as the S&P Goldman Sachs Commodity Index - down about 15 per cent last year - has fuelled debate about whether investors should be looking at more actively managed portfolios.
"We are looking for a stable portfolio with a desired rate of return ... Our allocation is for the long run," Frans De Wit, a senior investment manager at PGGM, told the Commodities Week conference last week.
His is the second largest Dutch pension fund with 86 billion euros ($121.9 billion) under management.
"If you are looking for high returns then you shouldn't be invested in an index," he said. PGGM has four per cent of its assets in commodities.
Commodities have a negative correlation to stocks and bonds and so are ideal for pension funds, which after the 2000 equity market crash decimated their portfolios have been looking for ways to minimise the risks of large losses.
Many investors have opted for the S&P GSCI because about 70 per cent of its allocation is to energy. That makes it a good hedge against inflation, which erodes corporate earnings.
Inflation typically also means higher interest rates, which often leads to lower prices of government and corporate bonds.
Forays
"(Commodity indices) provide diversification and a negative correlation with most of the assets we hold," said Helene Winch, associate director at UK-based Hermes Pensions Management with £68 billion under management.
Hermes has £1 billion invested in a basket of commodities.
The decision to stay with indices may be vindicated by index performance this year. The S&P GSCI gained more than 18 per cent in the nine months to end-September, while US benchmark the S&P 500 managed about seven per cent.
Investment products based on indices including the S&P GSCI, the Dow Jones AIG, are estimated to manage around $100 billion. Commodity hedge funds are growing, but the amount of money they manage is still a fraction of index money.
Hedge funds often specialise in metals, agricultural commodities or related equities, Some are involved in transport and others are making forays into physical markets.
"It's a different kind of exposure," said Catherine Claydon, a managing director in the pensions advisory group at investment bank Lehman Brothers.
Also a problem is the fact that most commodity hedge funds are small and do not have capacity to manage successfully the large amounts of money pension funds need to allocate.
That, Winch said, raises liquidity issues.
"Trying to find a home for $2 billion ... would be tricky," she said. "If a hedge fund is investing in commodity linked equities, that's what we have (already) and that's what we don't want."
Most indices also have specific allocations to sectors, so if the value of one sector rises then the allocation has to be rebalanced to meet the benchmark criteria.
Platinum and gold prices at new high
The price of platinum forged a record high yesterday as the white metal was hit by tight global supplies, while gold soared to the best level since 1980 on the back of the weak US dollar, analysts said.
Platinum surged as high as $1,408.50 an ounce on the London Platinum and Palladium Market. That beat its previous all-time high point of $1,402.50 hit in November 2006. Gold prices leapt yesterday as high as $752.04 per ounce on the London Bullion Market.
Platinum is used by the jewellery industry and in the manufacture of catalytic exhaust units for vehicles. Platinum, already beset with tight supplies, took another hit from fresh concerns in South Africa.
“The rise in (platinum) prices has been supported by concerns over supply following news of electrical power shortages in South Africa — the world’s largest producer of platinum,” said Barclays Capital analysts.
“The power supply to smelters owned by Anglo Platinum was disrupted and reignited fears that the power situation could worsen over the next few years.”
Gold, meanwhile, tends to rise in value when the US unit weakens because it makes commodities that are priced in dollars cheaper for buyers using stronger currencies. “Gold prices strengthened again as US dollar weakness underpinned solid gains,” Barclays Capital analysts added.
The high came as the European single currency bounced back above $1.42, rising close to its record high $1.4283 that was struck on October 1.
The precious metal is also supported by strong crude oil prices, which in turn spark inflationary concerns. However, gold is regarded as a safe bet in times of rising inflation.
Global demand for gold is also surging owing to increased jewellery purchases in China and India, the World Gold Council said in its latest quarterly report, published in August. It added that demand was being fuelled by higher purchases of the metal by industry and wealthy individuals.
“The dollar’s continuing weakness, continuing high commodity prices and near record oil prices above $80 per barrel are inflationary and conducive to higher gold prices,” analysts at Gold Investments said.
Platinum surged as high as $1,408.50 an ounce on the London Platinum and Palladium Market. That beat its previous all-time high point of $1,402.50 hit in November 2006. Gold prices leapt yesterday as high as $752.04 per ounce on the London Bullion Market.
Platinum is used by the jewellery industry and in the manufacture of catalytic exhaust units for vehicles. Platinum, already beset with tight supplies, took another hit from fresh concerns in South Africa.
“The rise in (platinum) prices has been supported by concerns over supply following news of electrical power shortages in South Africa — the world’s largest producer of platinum,” said Barclays Capital analysts.
“The power supply to smelters owned by Anglo Platinum was disrupted and reignited fears that the power situation could worsen over the next few years.”
Gold, meanwhile, tends to rise in value when the US unit weakens because it makes commodities that are priced in dollars cheaper for buyers using stronger currencies. “Gold prices strengthened again as US dollar weakness underpinned solid gains,” Barclays Capital analysts added.
The high came as the European single currency bounced back above $1.42, rising close to its record high $1.4283 that was struck on October 1.
The precious metal is also supported by strong crude oil prices, which in turn spark inflationary concerns. However, gold is regarded as a safe bet in times of rising inflation.
Global demand for gold is also surging owing to increased jewellery purchases in China and India, the World Gold Council said in its latest quarterly report, published in August. It added that demand was being fuelled by higher purchases of the metal by industry and wealthy individuals.
“The dollar’s continuing weakness, continuing high commodity prices and near record oil prices above $80 per barrel are inflationary and conducive to higher gold prices,” analysts at Gold Investments said.
The mystery of Johnson Matthey
(Daily Mail - McClatchy-Tribune Information Services via COMTEX) -- Its headquarters are in Hatton Garden, the centre of London's jewellery trade. It is a market leader in the refining of platinum, gold and silver. Its business serves the world's mining industries and manufactures high purity small gold bars for investment and jewellery manufacture.
It is a pseudo mining stock, so dealers ask why has Johnson Matthey been left miles behind the buoyant mining sector as prices of precious metals continue to go through the roof?
Gold again breached another 28-year high of $747 an ounce. The higher the average price, the higher commission JM makes.
The penny dropped for some fund managers yesterday who chased the underperforming stock 24p higher to 1675p, still well below the year's peak of 1828p.
The appointment of Merrill Lynch as joint broker to stand alongside Credit Suisse also prompted speculation.
Some think an earnings enhancing corporate deal could be on the menu, others reckon the Thundering Herd will soon host an American roadshow and introduce many heavyweight US investors to the stock.
JM's other businesses are trading well, attracting strong demand for catalytic convertors as a result of stricter government emission regulations.
Meanwhile, a buoyant mining sector was in focus, led by heavy buying of Rio Tinto which touched 4597p before closing 155p better at 4563p on revived talk of a possible bid from the world's biggest mining group BHP Billiton (79p up at 1880p).
Rumours were rife last month BHP was getting together with Brazilian mining group CVRD to break Rio up.
Vedanta Resources jumped 127p to 2317p after Merrill Lynch advised clients to dig in and raised its target price to 2450p. Kazakhmys rose 65p to 1589p and Xstrata 137p to 3592p.
The magnificent miners helped the Footsie flirt with July's seven year high of 6,732.4. It closed 91.5 points better at 6,724.5, while the FTSE 250 added 110.8 points at 11,622.9. Bulls are still pinning their hopes on UK interest rates moving south in November.
Wall Street helped the cause by rising 106 points to a record 14,185.3 in early trading after Wal Mart, the world's biggest retailer, raised its profits expectations for the third quarter.
Mobile phone giant Vodafone provided more than 24 points of the Footsie's gain, buzzing 8 1/2p higher to 179 1/2p on hefty turnover of 567m shares. Buyers piled amid rumours that chief executive Arun Sarin will soon step down after master-minding the sale of its 45pc stake in Verizon Wireless. This is the final year that Vodafone has an option to sell part of its wireless stake.
Often rumoured to be on the shopping list of Royal Dutch Shell (up 49p at 2034p), BG Group spurted 40p to 883p.
Schroders rose 60p more to 1560p despite a denial that it is on the verge of selling its asset management business in order to focus on its private banking operation. The cash rich investment bank is rumoured to be considering rewarding shareholders with a special dividend.
BAE Systems breached GBP5 for the first time, closing 9 1/2p dearer at 506 1/2p following a bullish note from Cazenove. The broker says it continues to see positive news flow on the horizon ahead of an analysts trip next week.
Housebuilders were demolished by the Royal Institute of Chartered Surveyors survey for September which showed a big rise in members reporting house price falls in August. New buyer enquiries declined for the 10th consecutive month, falling at the fastest pace since March 2003. Taylor Wimpey lost 13p to 290 3/4p, Persimmon 42p to 1003p and Barratt Developments 26 1/2p to 722p.
Following upbeat City presentations hosted by broker Oriel Securities, Aggreko gained 20p to 646 1/2p. Business is apparently booming for the company which provides temporary power supplies to companies and countries hit by catastrophes such as storms and floods.
Dog of the day was Imprint, 39 1/4p down at 82 1/2p. Investors ran for the exit after the international recruitment services group wheeled out the third profits warning this year and said that co-founder and chief executive Brian Hamill has resigned.
Struggling personal debt advice specialist Accuma jumped 9p to 30 1/2p after revealing several bid approaches.
Serial investor William Weston's purchase of a 3.2pc stake in the dental equipment manufacturer helped Astek add 3/4p at 31/8p. Gold Oil was suspended at 63/8p, down 1/4p, pending a bullish transaction announcement.
It is a pseudo mining stock, so dealers ask why has Johnson Matthey been left miles behind the buoyant mining sector as prices of precious metals continue to go through the roof?
Gold again breached another 28-year high of $747 an ounce. The higher the average price, the higher commission JM makes.
The penny dropped for some fund managers yesterday who chased the underperforming stock 24p higher to 1675p, still well below the year's peak of 1828p.
The appointment of Merrill Lynch as joint broker to stand alongside Credit Suisse also prompted speculation.
Some think an earnings enhancing corporate deal could be on the menu, others reckon the Thundering Herd will soon host an American roadshow and introduce many heavyweight US investors to the stock.
JM's other businesses are trading well, attracting strong demand for catalytic convertors as a result of stricter government emission regulations.
Meanwhile, a buoyant mining sector was in focus, led by heavy buying of Rio Tinto which touched 4597p before closing 155p better at 4563p on revived talk of a possible bid from the world's biggest mining group BHP Billiton (79p up at 1880p).
Rumours were rife last month BHP was getting together with Brazilian mining group CVRD to break Rio up.
Vedanta Resources jumped 127p to 2317p after Merrill Lynch advised clients to dig in and raised its target price to 2450p. Kazakhmys rose 65p to 1589p and Xstrata 137p to 3592p.
The magnificent miners helped the Footsie flirt with July's seven year high of 6,732.4. It closed 91.5 points better at 6,724.5, while the FTSE 250 added 110.8 points at 11,622.9. Bulls are still pinning their hopes on UK interest rates moving south in November.
Wall Street helped the cause by rising 106 points to a record 14,185.3 in early trading after Wal Mart, the world's biggest retailer, raised its profits expectations for the third quarter.
Mobile phone giant Vodafone provided more than 24 points of the Footsie's gain, buzzing 8 1/2p higher to 179 1/2p on hefty turnover of 567m shares. Buyers piled amid rumours that chief executive Arun Sarin will soon step down after master-minding the sale of its 45pc stake in Verizon Wireless. This is the final year that Vodafone has an option to sell part of its wireless stake.
Often rumoured to be on the shopping list of Royal Dutch Shell (up 49p at 2034p), BG Group spurted 40p to 883p.
Schroders rose 60p more to 1560p despite a denial that it is on the verge of selling its asset management business in order to focus on its private banking operation. The cash rich investment bank is rumoured to be considering rewarding shareholders with a special dividend.
BAE Systems breached GBP5 for the first time, closing 9 1/2p dearer at 506 1/2p following a bullish note from Cazenove. The broker says it continues to see positive news flow on the horizon ahead of an analysts trip next week.
Housebuilders were demolished by the Royal Institute of Chartered Surveyors survey for September which showed a big rise in members reporting house price falls in August. New buyer enquiries declined for the 10th consecutive month, falling at the fastest pace since March 2003. Taylor Wimpey lost 13p to 290 3/4p, Persimmon 42p to 1003p and Barratt Developments 26 1/2p to 722p.
Following upbeat City presentations hosted by broker Oriel Securities, Aggreko gained 20p to 646 1/2p. Business is apparently booming for the company which provides temporary power supplies to companies and countries hit by catastrophes such as storms and floods.
Dog of the day was Imprint, 39 1/4p down at 82 1/2p. Investors ran for the exit after the international recruitment services group wheeled out the third profits warning this year and said that co-founder and chief executive Brian Hamill has resigned.
Struggling personal debt advice specialist Accuma jumped 9p to 30 1/2p after revealing several bid approaches.
Serial investor William Weston's purchase of a 3.2pc stake in the dental equipment manufacturer helped Astek add 3/4p at 31/8p. Gold Oil was suspended at 63/8p, down 1/4p, pending a bullish transaction announcement.
Gold May Rally, Top 27-Year High, on Demand for Inflation Hedge
(Bloomberg) -- Gold may rise for a second straight week, topping a 27-year high, on speculation that a weaker dollar and higher crude-oil prices will boost the appeal of the precious metal as a hedge against inflation.
Twenty-three of 28 traders, investors and analysts surveyed by Bloomberg from Sydney to Chicago on Oct. 11 and Oct. 12 advised buying gold, which rose 0.9 percent last week to $753.80 an ounce in New York. Three said to sell, and two were neutral.
Gold is up 18 percent this year, heading for a seventh straight annual gain. On Oct. 11, the metal reached $759.30, the highest since Jan. 20, 1980. The dollar touched an all-time low against the euro Oct. 1, and oil climbed to a record Oct. 12.
A majority of analysts surveyed Oct. 4 and Oct. 5 anticipated last week's gain. The survey has accurately forecast the direction of prices in 111 of 181 weeks, or 61 percent.
Twenty-three of 28 traders, investors and analysts surveyed by Bloomberg from Sydney to Chicago on Oct. 11 and Oct. 12 advised buying gold, which rose 0.9 percent last week to $753.80 an ounce in New York. Three said to sell, and two were neutral.
Gold is up 18 percent this year, heading for a seventh straight annual gain. On Oct. 11, the metal reached $759.30, the highest since Jan. 20, 1980. The dollar touched an all-time low against the euro Oct. 1, and oil climbed to a record Oct. 12.
A majority of analysts surveyed Oct. 4 and Oct. 5 anticipated last week's gain. The survey has accurately forecast the direction of prices in 111 of 181 weeks, or 61 percent.
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