THE TIPSTER
GOLD has sold off sharply although rather than the usual risk appetite explanation, fingers are pointing towards central banks offloading the asset to the Bank of International Settlements. However, with the risk a double-dip still looming, there’s no shortage of reasons why the foray below $1,200/ per oz will be short lived. The current IG Index gold price is $1,195.36-$1,195.86.
Sir Terry Leahy’s departure from retail giant Tesco may have caused concern amongst investors but Amazon’s announcement that it will start selling groceries is unlikely to affect Tesco in any meaningful way. Supermarket websites are, by and large, extremely comprehensive and have been adopted by many thousands of customers, so they should be able to withstand competition from the online retailer. Analysts certainly aren’t short of criticism in their assessment of the move. As one said of Amazon, “I think this is slightly mad”. The current IG Index price on Tesco is 392.1p-392.9p and the current IG Index price on Amazon is $111.23-$111.34.
The recent rebound in risk appetite has seen gold pull back from its recent highs. Silver also had a good run during the recent bout of market turbulence, but it has lagged behind gold due to its dual purpose as being an industrial as well as a precious metal. However like gold, it should find support on dips around the $17.00 area. CMC Markets’ spread for silver is $17.70-$17.75.
The dollar index has been in decline since reaching a high last month. This could signal further weakness. Capital Spreads quotes a price of 84.410-84.440 for the September contract.
Associated British Foods fell back yesterday after gaining nearly 2.5 per cent on Tuesday ahead of today’s third-quarter rading update. Investec raised its target price for the company from £10.60 to £10.80 thanks to continued growth in Primark, which continues to perform strongly. ShortsandLongs.com has a rolling spread of 962.5p-965.5p.