Spot Gold Prices rose strongly in Asia early Wednesday, gaining more than 1% to recover Monday's two-month highs as London re-opened for business after the New Year's holiday.
In Tokyo the Nikkei stock index dropped 1.6% on the first trading day of 2008, while Chinese stocks ended the session almost 1% lower.
European shares rose however, led 0.6% higher on average by mining and energy stocks as crude oil rose above $96 per barrel.
Oil prices rose nearly 58% in 2007, while the Gold Market added 36.5%. Energy analysts are now awaiting data on US oil stockpiles, due out on Thursday. Today brings US construction & manufacturing data for Nov. and Dec. respectively, with Wall Street forecasting a drop in both measures.
Minutes from the US Federal Reserve's latest meeting follow at 14:00 EST. Tomorrow and Friday will see a slew of US employment data.
Early Wednesday, the United Kingdom reported sharply lower manufacturing figures for Dec., helping to push the British Pound back towards last week's four-month lows beneath $1.98.
That sent the Gold Price in Pounds Sterling to new all-time record highs above £424.50 per ounce. Gold gained 31% last year for British investors, its seventh annual gain on the run.
"Britain this year faces the most difficult economic conditions since the dotcom bubble burst," says the Financial Times today in its annual survey of 55 leading economists.
"Nearly nine in 10 think public finances are not in good order," says the paper. "The third most-mentioned risk to the economy is inflation, limiting the ability of the Bank of England to cut interest rates.
"Nearly two-thirds of the economists – from the City, academia and including five former members of the monetary policy committee – thought house prices would fall this year."
For European investors wanting to Buy Gold Today, the price hit €574 per ounce as London opened and the single Euro currency recovered $1.4650, a little over 2% below its all-time record above $1.4950 hit in late Nov.
The Euro gained nearly one-fifth versus the US currency last year, but the Gold Price in Euros also rose, gaining more than 21%. That disproves the common belief that gold and Euros move in sync.
Indeed, the Gold Price measured against the world's five most important currencies – the US Dollar, Euros, Yen, Pound Sterling and Canadian Dollar – has now gained more than 150% since the start of this decade.
"With continuing concerns for increased inflationary pressures and global security tensions, coupled with a still weak outlook for the US Dollar, gold is likely to continue to perform well in 2008," says Standard Bank in its daily report today.
"It is more likely than not for gold to set new records in the coming year."
"We believe the story for gold is still a bullish one in the short term," agrees Investec in Australia.
"With the US Dollar still very much under pressure, geopolitical tensions rising and of course with the start of a new quarter comes the reallocation of fund money which will more than likely see gold in favor."
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