Weak economic news from Europe, confirming the ongoing weak global economy, has shares of Goldcorp (NYSE:GG), Barrick Gold (NYSE:ABX), Newmont Mining (NYSE:NEM) and Kinross Gold (NYSE:KGC) all moving up with the price of gold.
Gold on the New York Mercantile Exchange reached a record high of $1273.40, jumping $25.90 for December delivery.
A weaker U.S. dollar may have contributed a little earlier in the session, but the price movement of gold shows investors aren't buying into the hype that there is an economic recovery.
Mainstream financial news targets every bit of positive for their man Obama, while lightly covering the economic disaster growing under his administration.
Investors and business know the real conditions, and the ongoing weakness confirms we're a long way from any real recovery, and gold will continue its long bull run in response to those realities.
Showing posts with label New York Mercantile Exchange. Show all posts
Showing posts with label New York Mercantile Exchange. Show all posts
Tuesday, September 14, 2010
Friday, September 3, 2010
Mariner (NYSE:ME) Rig Fire Pushes Oil Prices Up
Reports of an explosion and fire on a Gulf oil rig operated by Mariner Energy (NYSE:ME) helped push the price of oil futures past the $75 a barrel mark by the end of Thursday's session.
On the New York Mercantile Exchange, crude for October delivery increased $1.11, to $75.02 a barrel.
As usual this was an emotional response, as the rig was a production rig and not a exploration and drilling rig like the Deepwater Horizon connected to BP's (NYSE:BP) oil spill.
Production rigs collect oil and gas from remote wells, process it, and then transport it through a pipeline to shore.
These types of incidents are very common on rigs, and happen around the world and in the Gulf very frequently. Over 130 were reported in 2009 alone, and that was just those counted in the Gulf.
Either way, oil prices went up more because of the lack of information and media frenzy, rather than anything based on the circumstances surrounding the rig fire.
On the New York Mercantile Exchange, crude for October delivery increased $1.11, to $75.02 a barrel.
As usual this was an emotional response, as the rig was a production rig and not a exploration and drilling rig like the Deepwater Horizon connected to BP's (NYSE:BP) oil spill.
Production rigs collect oil and gas from remote wells, process it, and then transport it through a pipeline to shore.
These types of incidents are very common on rigs, and happen around the world and in the Gulf very frequently. Over 130 were reported in 2009 alone, and that was just those counted in the Gulf.
Either way, oil prices went up more because of the lack of information and media frenzy, rather than anything based on the circumstances surrounding the rig fire.
Friday, October 24, 2008
Commodities: Gold Fall Lowest in 21 Months
Gold continues to get hammered as institutional investors continue to sell their precious metal positions in order to raise cash to cover bad stock trades and other bad investments.
The reason they have to do this is because they leveraged themselves to make investments, and now lenders are calling their loans, forcing them to raise short-term cash. This is why the usual strength and safety of gold in times like these hasn't come about, as prices continue to be pressured downward.
On the other side of it, the U.S. dollar has been the beneficiary of this trend, as most commodities, including gold, is dollar-denominated, pushing the greenback up in circumstances which usually weaken it.
Since the underlying fundamentals remain the same, this will eventually correct itself, but because of the complexity of some of the financial instruments invested in, it's impossible to measure the amount of time it will take for all of this to unwind.
Once it does, things will start to react normally again, and the U.S. dollar will start to fall, while gold will again rise. Again though, the time frame is impossible to predict at this time.
Early today December delivery for gold dropped to $681 an ounce on the New York Mercantile Exchange, a $33.70 fall. That's the lowest since January 11, 2007. Later in the session gold rebounded to $708.70.
Gold could end Friday with the worst trading week in its history.
The reason they have to do this is because they leveraged themselves to make investments, and now lenders are calling their loans, forcing them to raise short-term cash. This is why the usual strength and safety of gold in times like these hasn't come about, as prices continue to be pressured downward.
On the other side of it, the U.S. dollar has been the beneficiary of this trend, as most commodities, including gold, is dollar-denominated, pushing the greenback up in circumstances which usually weaken it.
Since the underlying fundamentals remain the same, this will eventually correct itself, but because of the complexity of some of the financial instruments invested in, it's impossible to measure the amount of time it will take for all of this to unwind.
Once it does, things will start to react normally again, and the U.S. dollar will start to fall, while gold will again rise. Again though, the time frame is impossible to predict at this time.
Early today December delivery for gold dropped to $681 an ounce on the New York Mercantile Exchange, a $33.70 fall. That's the lowest since January 11, 2007. Later in the session gold rebounded to $708.70.
Gold could end Friday with the worst trading week in its history.
Commodities: OPEC Slashes Oil Production
OPEC Continues Cutting Oil in Effort to Support Prices
In a dramatic emergency meeting meant to shore up the plunging price of oil, OPEC slashed oil production by 1.5 million, in the middle of the expected 1 million to 2 million barrels analysts were looking for.
Even though OPEC will cut production dramatically, crude prices responded by falling another 5 percent; evidently speaking to demand, which isn't going to change in the current economic crisis, which has consumers cutting back on any unnecessary spending or traveling.
OPEC is of course cautious in their approach, as some of the other oil-producing nations pressured them to cut production by at least 2 million barrels a day. The problem they face is if they cut it too much, and prices surge too high, consumers will cut back even more on expenses, and the plan would backfire.
All this has done for OPEC is offer the possibility of neutralizing or slowing down the fall; it won't make prices go up much higher ... if at all.
OPEC President Chakib Khelil confirmed this saying the intention of the production cuts was to limit the fall in oil prices, not an attempt to increase them.
Khelil was quick to add that even with the idea of consumers cutting back if prices go too high is part of their decision, they will cut production even more if crude prices drop to unsustainable levels.
On the New York Mercantile Exchange today, oil futures fell at one point to under $63 a barrel, while they were at $64.51 a barrel at around noon EST.
What it looks like OPEC is attempting to do is stop the price drop per barrel at about $60.
At this point nothing OPEC is doing is doing in cutting oil prices is keeping the price of oil stable.
In a dramatic emergency meeting meant to shore up the plunging price of oil, OPEC slashed oil production by 1.5 million, in the middle of the expected 1 million to 2 million barrels analysts were looking for.
Even though OPEC will cut production dramatically, crude prices responded by falling another 5 percent; evidently speaking to demand, which isn't going to change in the current economic crisis, which has consumers cutting back on any unnecessary spending or traveling.
OPEC is of course cautious in their approach, as some of the other oil-producing nations pressured them to cut production by at least 2 million barrels a day. The problem they face is if they cut it too much, and prices surge too high, consumers will cut back even more on expenses, and the plan would backfire.
All this has done for OPEC is offer the possibility of neutralizing or slowing down the fall; it won't make prices go up much higher ... if at all.
OPEC President Chakib Khelil confirmed this saying the intention of the production cuts was to limit the fall in oil prices, not an attempt to increase them.
Khelil was quick to add that even with the idea of consumers cutting back if prices go too high is part of their decision, they will cut production even more if crude prices drop to unsustainable levels.
On the New York Mercantile Exchange today, oil futures fell at one point to under $63 a barrel, while they were at $64.51 a barrel at around noon EST.
What it looks like OPEC is attempting to do is stop the price drop per barrel at about $60.
At this point nothing OPEC is doing is doing in cutting oil prices is keeping the price of oil stable.
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