Gold News

Currency traders wipe out gold's 2006 gains

A sharp rally in Sterling at the start of today's European trading has erased almost all of this year's gains for British gold investors. Gold has also pulled back to January prices Eurozone gold buyers, while Dollar and Yen investents in gold remain unchanged from 1 month ago.

The AM Fix in London priced one ounce of gold just below £314, a level first crossed by this bull market in January. Sterling shot through $1.96 against the Dollar on strong house-price news, and fresh M&A deals in the London stock market.

"The British market has seen an M&A boom and nothing we look at suggests it's over," said a strategist at Morgan Stanley. But an analyst at RBS points out that "80 to 85% of rumours turn out to be either misinformation or just somebody repeating a story that was maybe even months old."

"Will the FTSE go any further on the back of these rumours?" he asks. "It shouldn't really...There is already a massive premium built in."

There's a massive premium built into Sterling itself today. Yet the world's central bankers just can't get enough of Britain's currency right now. What might it mean for investors buying gold in any major currency today? Click here for the full story...

Adrian Ash is director of research at BullionVault, the physical gold and silver 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 is now a regular contributor to many leading analysis sites including Forbes and a regular guest on BBC national and international radio and television news. Adrian's views on the gold market have been sought by the Financial Times and Economist magazine in London; CNBC, Bloomberg and TheStreet.com in New York; Germany's Der Stern; Italy's Il Sole 24 Ore, and many other respected finance publications.

See the full archive of Adrian Ash articles on GoldNews.

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