Gold News

Gold jumps higher yet again at the NY open

Gold jumped once again at the New York open today, leaping nearly 1% higher to a fresh 7-month high above $661 per ounce.

And again the move hit all major currencies, knocking the Pound back to a new four-month low of 1/335th of an ounce. The Euro fell to a five-month low worth 1/505th of an ounce.

But today's move – unlike the jump yesterday and last week – didn't hold all of gold's immediate gains. The Dollar price has since dipped back to $657.50.

"It's definitely technically driven," says one analyst, referring to how chart-watching traders have piled in to gold. "The buying came into the market exactly when we crossed through $655 an ounce...

"That was perceived to be a very important level because it was the price from which gold broke down," he notes, referring to the price from which gold dropped fast both at the start of last week and back in August.

"Short-term sentiment is now good," adds Jeremy East, head of metals trading at Standard Chartered Bank. "It's not just gold, but oil is a lot higher as well. Definitely, investment flows are coming into commodities."

Investment flows into the LyxOr GBS shares are rising. Its holdings rose to $1.81 billion yesterday, the highest since Dec. 14.

But investment flows into all assets are rising right alongside gold at the moment. The Nikkei in Tokyo closed today at a 10-month high. The FTSE100 index of London's biggest shares has jumped since this morning.

The MSCI index of global equities has just hit a fresh all-time record high. Bond prices have also risen following the US Fed's decision to keep Dollar interest rates on hold at 5.25% yesterday.

"The general trend in oil and the dollar is supporting gold, driven by demand from investors and speculators,'' says Wolfgang Wrzesniok-Rossbach, the head of sales and marketing for Heraeus, the German precious metals company.

"Technically, gold is in a nice uptrend," he says. But then, so is everything else!

Can gold continue to rise as everything else goes higher? Classically it's supposed to move in opposition to paper asset prices.

Not now, however. The flood of cheap credit washing across the world is forcing all boats higher.

To find out more – and to find out why gold could be left at the high-tide mark as other asset prices sink back – click here and read on...

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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