Gold has moved in tandem to a certain degree with the euro

Gold prices oscillated between gains and losses near $1,750 per ounce on Wednesday as the yellow metal remained in consolidation mode.  The price of gold held in a narrow range between $1,744 and $1,755 in overnight trading despite further weakness in the U.S. dollar.  The euro currency climbed 0.5% to 1.3125 against the dollar, its highest level in a month, after Moody’s rating agency chose not to downgrade Spain’s credit rating to non­investment grade status.

The gold price held steady alongside the broader commodity and equity markets across the globe on Wednesday as investors continued to await a potential bailout for Spain.  While Moody’s affirmed the nation’s investment grade credit rating, speculation has grown that Spain will request financial assistance from the euro zone in the near future.  Most recently, reports surfaced that Germany is open to a possible line of credit for Spain.

Commenting on the implications of the situation in Europe for the price of gold, David Govett – head of precious metals at Marex Spectron – noted that “Gold has moved in tandem to a certain degree with the euro and other commodities and rallied overnight on a weaker dollar, but it has run out of steam.”

“Most people are sitting back and waiting for tomorrow’s European Union summit to go ahead to see if anything comes out of that,” Govett added.  “If there was a sudden announcement and Spain asked for help then it will be good for the euro, the dollar would come off and it would be good for gold.”
UBS precious metals strategist Edel Tully wrote in a report to clients that “The overall attitude towards the yellow metal remains positive looking out over the months ahead, but hesitancy to express that view in the near term is becoming an obstacle. It feels like gold needs a healthy clean-out at this juncture.”

Tully went on to say that “A further correction from here would ultimately be beneficial though, given the sharp run-up in prices since mid-October, the repeated failure to breach $1,800 and the degree of speculative length.”


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


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

Back to TOP