2012-06-29

For the moment people want liquidity so they are selling gold

The gold price turned lower on Thursday, weighed down by a rebound in the U.S. dollar and weakness in the broader financial markets.  The spot price of gold fell by as much as $24.14, or 1.5%, to $1,550.94 per ounce this morning before consolidating near $1,553 per ounce.

In Europe, investors grew increasingly disappointed with the potential for meaningful reforms from the two-day European Union (EU) summit that began on Thursday.  These concerns were exacerbated by recent comments from German Chancellor Angela Merkel, who spoke out against proposals by several euro zone nations for the euro zone to assume greater financial responsibility for individual countries’ debts.
As for the gold price, “There’s no semblance of a safe-haven at the moment,” according to Societe Generale analyst Robin Bhar.  ”For the moment people want liquidity so they are selling gold,” he added.
However, Bhar asserted that “As the price goes lower that bid does come back as you maybe get some renewed investor interest – sovereign wealth funds and central banks looking to nibble away and even some physical buying.”

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