Gold News

Asia & London Buy Gold "But N.America Selling" as Safe-Haven Bids "Prove Short-Lived" Despite Ukraine-Russia Battles

BUY GOLD bids in London trade fell Friday morning, cutting the metal's August gain to just 0.3% as world stock markets stalled after Wall Street failed to make new highs yesterday.
 
Bond prices rose once again after weaker-than-forecast Eurozone inflation data.
 
Kiev's parliament today moved to join Nato – which said Moscow had "violated" Ukraine's sovereignty – as Russian president Putin likened Ukrainian attempts to retake the separatist city of Donetsk to the Nazi siege of Leningrad in 1942.
 
Trading at $1286 per ounce ahead of the long US Labor Day weekend, prices to buy gold peaked at a 1-month high of $1322 in the second week of August.
 
Silver prices today steadied above $19.50 per ounce, up 0.6% from last Friday but down over 4% from the end of July.
 
"In view of the further escalation of the Ukraine-Russia conflict," reckons a note from Germany's Commerzbank, "precious metals were in demand as safe havens yesterday."
 
But "safe-haven demand for gold," counters Australia's ANZ Bank, "is proving short-lived."
 
"[Thursday] just confirmed that gold and silver are going nowhere for the time being," agrees David Govett at brokers Marex Spectron in London.
 
"If you have the appetite for it, you can day trade the ranges for the foreseeable future."
 
The "safe-haven move", Reuters quotes refining-group Heraeus' trader Alexander Zumpfe, is currently being "outweighed by market expectation of higher US interest rates."
 
"You clearly see Dollar strength in the gold price," says Swiss bank UBS's wealth management CIO Dominic Schnider, speaking to CNBC.
 
"In Euro terms the gold price is pretty much flat, so most of the [last 3 weeks'] downturn is being driven by the stronger Dollar."
 
Looking at 24-hour trading patterns, "Gold has managed three days of higher closes," adds Canadian bank and London market-maker Scotia Mocatta in its daily note, but "the North American time segment shows that bearish candle sticks (close lower then opening).
 
"This basically states that overall gold is moving higher, but it is Asia/London doing all the buying, with North America a steady seller."
 
Over in Asia on Friday, Shanghai gold contracts held near $2 per ounce above London prices, taking August's full-month average to the strongest – and first positive – premium to the world's benchmark quotes since May.
 
Hong Kong premiums were lower however at 80 cents per ounce, with Tokyo prices to buy gold in line with London quotes.
 
"It's the summer season and it's normally very quiet," a Japanese dealer told Reuters earlier. 
 
"I can't see any [gold] buying or selling at the moment."

 

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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