Gold News

Spot gold slips from 5-week highs in thin holiday trade

Spot gold prices ticked lower in Tokyo on Monday, dipping $4 at one point but ending the Asian session just $2 down from Thursday's 5-week highs at $672 per ounce.

Tokyo futures for Feb. '08 delivery dropped one yen to equal $677. Hong Kong, Sydney and London are closed today for the Easter holiday.

New York is open for equity and bond trades, but gold dealing should be light in the absence of both London price Fixes and any major US economic news to follow Friday's greater than expected new jobs data.

Thursday lunchtime in London, the Bank of England voted to keep UK interest rates on hold for another month.

That knocked one cent off the Pound against the Dollar, cut it 1.1% lower versus the Euro, and sent the Sterling price of gold above £341 per ounce. (Click here for the full story...)

"With gold successfully breaking and currently holding above chart technical level of $670," said Thursday's note from Standard Bank, "it promisingly suggests further gains could be achieved toward the next target of $680."

Gold also held above the critical €500 per ounce level for Eurozone investors too, successfully breached for the first in 5 weeks after Wednesday's surprisingly weak economic data from the US.

Looking further ahead, the deep global trends supporting the six-year bull market in gold bullion so far look set to continue.

"We have a long-term bullish view on the commodity," announced Michael Lewis, global head of commodities research at Deutsche Bank, in a note on Thursday.

He cites a weaker Dollar, underlying demand for gold jewelry, and also expectations of low real interest rates.

This last point is key. If you've been wondering what really drives the gold price higher or lower long-term, click here now and read on for the facts...

Adrian Ash

Adrian Ash, BullionVault Gold News

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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