Greece has secured a €130 billion rescue package - Gold prices rose

The gold price spiked Tuesday morning, rising $11.50 to $1,746 per ounce.  News late yesterday that Greece has secured a €130 billion rescue package failed to quell speculation that Greece would eventually be forced out or leave the euro. Gold prices rose on the news.

Last week, a plethora of U.S. economic data combined with ongoing uncertainty over the Greek bailout to send the gold price oscillating between gains and losses.  Looking ahead to the coming week, a similar slate of items likely to impact the price of gold await.  Euro zone officials will hold additional meetings to discuss the specifics of Greece’s aid package.  Also, the U.S. economic calendar contains several noteworthy reports.

Mark Luschini, chief investment strategist at Janney Montgomery Scott, wrote in a recent note to clients that “Everyone is playing this gigantic game of brinksmanship but I suspect they [Greece and the euro zone] are working toward avoiding default and there will be an agreement. Greece knows what it will have to do and Europe will provide funds.”

Lushini was proved correct and the euro currency is rallying against the U.S. dollar this morning.  The gold price, given its relatively high correlation of late with the euro, is also catching a bid off the news out of Europe.  The currency debasement that will inevitably stem from yet another bailout bodes well for gold’s longer-term prospects.

In the U.S., Existing Home Sales for January will be released on Wednesday, followed by weekly jobless claims on Thursday.  Last week, jobless claims fell to 348,000 – their lowest level since March 2008.  However, a considerable portion of the decline has been due to a drop in the labor participation rate, suggesting that many individuals are dropping out of their labor force.  The week then concludes on Friday with the University of Michigan Consumer Sentiment Index and New Home Sales for January.

Comments

Post a Comment

Popular posts from this blog

Gold edges up on weaker dollar, dovish U.S. Fed policy bets

Image
 Gold edged higher on Monday, helped by a weaker dollar and expectations that the U.S. Federal Reserve will reiterate its dovish monetary policy stance this week. Spot gold was up by 0.1% at $1,943.58 per ounce. U.S. gold futures rose 0.1% to $1,950.10 per ounce. “Gold is firm on the basis that the Fed could adopt a further dovish message with respect to average inflation targeting,” said Michael Hewson, chief market analyst at CMC Markets UK. “If you want to have a policy of average inflation targeting, you’re going to have to go into detail as to how you are going to arrive at that particular outcome.” The dollar retreated on Mond ay, bolstering gold’s appeal for investors holding other currencies, ahead of the Fed’s policy decision due on Wednesday. “If inflation forecasts remain at 2% or below, this could offer gold a tailwind as the zero-yielding metal thrives in a low-interest rate environment,” said FXTM analyst Lukman Otunuga. Market participants are also waiting
Read more

Gold Price Futures (GC) Technical Analysis – Trader Reaction to Minor 50% Level at $1954.80 Sets the Tone

Image
  Gold futures closed lower on Thursday but up from its low of the session as investors battled a number of factors including U.S. economic data and outside market influences. Earlier in the session, gold fell over 1%, as positive economic data elevated hopes for a quick recovery while dampening the investment appeal of the precious metal. On Thursday, December Comex gold futures settled at $1937.40, down $11.60 or -0.60%. On the data front, a drop in U.S. jobless claims reported Thursday and positive manufacturing data reported earlier in the week are taking some shine off gold. A weaker Euro is also weighing on dollar-denominated gold by driving up thU.S. Dollar Index. U.S. weekly jobless claims fell below 1 million last week for the second time since the pandemic started, but did not signal a strong recovery in the labor market because the drop largely reflected a change in the methodology used to address seasonal fluctuations in data. Earlier in the week, a report s
Read more

India, not Trump, is the real reason behind the crash in gold prices

Image
If you have been puzzled about the crash in gold prices after Donald Trump's election, you are in the company of almost every analyst and media outlet in the western world. Gold and silver are a major part of the research at The Arora Report. A combination of our proven precious metal algorithms, extensive resources and knowledge of the emerging markets led us to alert subscribers to The Arora Report early that gold was about to crash and the reason behind it. Immediately after the election, the net position of The Arora Report in gold, silver and miners has been short as part of a sophisticated strategy.
Read more