Stocks spent another day in the red Wednesday as prospects of a deep global recession continued to rattle investors. CNBC's experts question why gold's price has declined while demand for the precious metal, and typically safe-haven stock, has increased.
Gold Reaches Record Demand
The World Gold Council reported record demand for gold in the third quarter. "There's been a recovery in demand, up 50% in terms of dollars," George Milling-Stanley, director at the World Gold Council, said.
"Gold's been acting like an insurance policy. Investors have been able to sell gold into a deep and liquid market in order to preserve their other investments. That's why we've not seen these very healthy demand figures translating into a stronger gold price yet," Milling-Stanley added.
Is Gold Losing its Luster?
"Gold is losing its luster," Daryl Guppy, CEO of gupptraders.com, told CNBC. Guppy adds that the support level for the precious metal is $700. If gold rebounds from that level, it will come across resistance at $780. Meanwhile, if it falls below $700, it could continue to decline to $620.
Once Deleveraging Abates, Gold Could Climb
Institutional selling of gold amid deleveraging of commodities to raise cash is offsetting the current retail demand for the precious metal, says Marcus Grubb, managing director, investment research and marketing at the World Gold Council.
There should be a stronger gold in the fourth quarter if the commodity deleveraging abates at the same time, Grubb said.
Auto Bailout Would Create 'Unfair Playing Field'
A US government bailout of General Motors will raise trade issues in the global automotive industry, and may create an "unfair playing field" for US companies, Mike Thompson from Standard & Poor's said. Eric Alain Michelis from Societe Generale commented on the implications of the bailout on carmakers in Europe.
Auto Bailout Negative for Dollar
The auto bailout will be negative for dollar sentiment, says Ray Attril, global head of research at Forecast.
But Positive for Commodities
If the auto bailout goes through, Jonathan Barratt, MD of Commodity Broking Services tells CNBC why this will be positive for the commodities market.
Markets Likely to Bottom Next Year
Markets are likely to bottom on lower volume and volatility in the first half of 2009, says Robert Howe, CEO of Geomatrix, speaking to CNBC.
Risky Times Ahead
As stocks may not fully reflect the impact of weak earnings until the first or second quarter of 2009, Stephen Davies, CEO of Javelin Wealth Mgmt tells CNBC investors should stay clear from the markets unless they are willing to take some risk.
Start Accumulating Selectively
As shares of many good companies have been beaten down, Donald Straszheim vice chairman at Roth Capital Partners believes it is a good time to accumulate quality stocks. But he tells CNBC why prefers to stay away from banks.
Convertible Bond Opportunities
Convertible bonds have been hard hit over the year, but are set to provide good investment opportunities, Skander Chabbi from DB Advisors told CNBC Wednesday.
Full Storm to Hit H1 2009
The full storm will hit in the first-half of 2009 when bigger economies such as India and China show significant slowdown in growth, observes Sailesh Jha, senior regional economist, Barclays Capital.
Global Recession Next Year
The pain for the real economy will come in the next several quarters, warns Selena Ling, head of treasury research & strategy at OCBC Bank.
SEA Commodities Firms Overvalued
Palm oil prices have bottomed out but stocks of companies like IOI and KLK are over-valued, observes Nirgunan Tiruchelvam, equities analyst of ABN Amro Securities, part of RBS.
Bonds Say No Armageddon
"Whatever Armageddon is priced in the stock market … the credit market is pricing something better," Riccardo Ronco from Friedman, Billings, Ramsey International told CNBC Wednesday.
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