Gold News

Spot gold regains $6 from last night's US close

Spot gold prices rose ahead of the US open on Tuesday, regaining more than $6 from Monday's close to near a 6-week high above $677 per ounce.

"If you are looking for one single most important factor, I would say that's the Dollar," said Michael Widmer of Calyon earlier to Reuters.

"All the precious metals benefited from that," he explained, pointing to the US Dollar's drop towards a two-year low against the Euro.

Gold also rose versus the other major currencies in the first half of European trade today, but the gains were muted compared to the move in Dollars.

Physical spot prices broke £345 for Sterling investors enjoying the Bank Holiday sunshine on Monday.

Since then, gold has pulled back slightly, but today recorded its highest Fix – of £343.31 per ounce – since Feb. 28th.

French, German and Italian investors looking to buy gold saw the metal pull back 0.6% from its own 6-week peak on Monday above €507 per ounce.

By mid-afternoon in Zurich on Tuesday, spot gold traded at €504 mid-price.

"The US Dollar continues to weaken and we are now looking for gold to break through $700 an ounce this year," says John Meyer at Numis Securities in London.

Meantime, action in the currency markets looks likely to continue driving the gold price, with leaders of the G7 nations meeting in Washington on Friday.

Tomorrow sees publication of minutes from the US Federal Reserve's latest policy meeting. The Fed chose to keep its rates on hold in March – as did the Bank of England when it met last Thursday.

The British Pound has since held steady against the falling Dollar, but lost more than a cent versus the Euro. (Click here to read more about Sterling's rotten outlook...)

On Wall Street, stock futures pointed slightly higher ahead of Tuesday's opening despite D.R. Horton – the largest US home builder – reporting quarterly net orders down 37%.

Bad news in the financial sector, too. Citigroup's much-awaited restructuring – due to be announced this week – may cut 26,000 staff from the payroll according to the New York Times.

CNBC forecasts a loss of 45,000 staff.

And in the oil pits, crude prices this morning regained $62 per barrel on Tehran's declaration that it has started industrial-scale enrichment of uranium. (To read more about oil's potential impact on gold prices, click here now...)

"With the return of markets on Tuesday," says Standard Bank, "gold should find increased activity.

"But [it] should remain largely range bound between $670 and $680 as it consolidates before resuming its rally to test resistance at $680 and subsequently at $690."

What factor above all others is driving this long-term bull market in spot gold prices? Click here to find out 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.

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