2012-02-24

Concerns over the effectiveness over the latest round of Greek bailout funds drove investors into the gold

The gold price held steady near $1,780 per ounce Thursday morning despite better than expected data on the state of the U.S. labor market.  The price of gold climbed to $1,787 prior to the release of weekly jobless claims, but relinquished its gains after they came in at a four-year low of 351,000.  In doing so, jobless claims beat the 355,000 consensus estimate among economists and fell to their lowest level since March 2008. 

Concerns over the effectiveness over the latest round of Greek bailout funds drove investors into the gold price and U.S. dollar.  In a note to clients, analysts at HSBC stated that “Even assuming the new Greek programme proceeds as planned, the Greek government crisis is far from over.  This deal will help creditors to be repaid, as the funds will be channelled into an escrow account to ensure that lenders are prioritized, but it will not revive economic growth any time soon.” HSBC went on to say that “With the Greek economy now in its fifth year of recession and already having contracted in the fourth quarter by 7% year-on-year, even the revised debt sustainability analysis looks optimistic.”

Another factor underpinning the gold price rally was bullish commentary from Goldman Sachs.  In a report published on Wednesday, the firm reiterated his $1,940 target by the end of the year.  Analysts led by Jeff Currie wrote that “We expect US real interest rates to remain lower for longer given our US economics team’s expectation for US economic growth to remain slow through 2012.  Consequently, we expect gold prices to continue to rise through 2012, reaching $1,940 an ounce in 12 months, and we continue to recommend a long gold position.”

0 comments:

Related Posts Plugin for WordPress, Blogger...

KLSE Info Zone

About This Blog

Malaysia Gold Investment

I found Gold Investment in Malaysia is a vary good tools to make profit when the market is down. I also found that Gold Price go up and down more slower compare to share market so to make money in long term, Gold is the right tools. This blog is all about Malaysia Gold Info and the way to make profi

Blog Malaysia

BlogMalaysia.com

  © Free Blogger Templates 'Greenery' by Ourblogtemplates.com 2008

Back to TOP