Gold News

Spot gold prices open London at new 6-week high

Physical spot gold prices rose throughout the Asian session on Tuesday, regaining $5 from Monday's US close.

That put spot gold prices at $676.50 by the time London first opened after the long Easter holiday weekend – the highest London opening in six weeks.

"The fundamental strength is very much intact in gold," reckons Si Kannan, associate vice president at Kotak Commodity Services in Mumbai.

Next week will see the festival of Akshaya Thrithiya celebrated across southern India.

Local jewelers are now looking to re-stock ahead of this increasingly popular season for gold purchases. (Learn more about India's impact on global gold prices here...)

"People are not expecting as high a demand as last year," says Kannan, "but large physical purchases would certainly support the gold market."

In the "paper gold" market, gold futures for June delivery traded up to touch $682.50 yesterday in New York, even though London was closed for the long Easter holiday.

That's the highest level since March 1st.

Now the market will be watching for tomorrow's release of the minutes from the last US Federal Reserve's monetary meeting.

Dr Bernanke and his team left the Fed's interest rate at 5.25%, but they dropped a key reference to further "tightening" in the face of inflationary pressures.

The gap between Fed interest rates and inflation is a crucial guide to the long-term direction of gold prices, a fact noted by Michael Lewis at Deutsche Bank late last week.

"We have a long-term bullish view on the commodity," wrote Lewis in a note on Thursday.

Jon Bergtheil, global metals strategist at JP Morgan, agrees.

"Gold seemed to ignore Iran when it was bad and ignores Iran when it’s better," he notes.
"We prefer to be in gold right now than base metals. We are positive and see gold at $725 by the beginning of the next year."

To learn more about the long-term factors driving the current bull market in gold, click here now...

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.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn



Market Fundamentals