Gold News

Euro Gold Jumps Near 2-Year High, Halves 2013 Plunge as Currency Sinks with Sterling, Global Equities Jump

EURO gold prices jumped towards their second-best weekly close in two years Friday, rising 3.9% from before Easter as the single currency sank and spot gold jumped back above $1200 per ounce in Dollar terms.
 
Erasing an earlier dip, "Precious metals [made a] sharp reversal despite stronger USD," says one London bullion bank's trading desk, calling it a "bullish sign".
 
"[There's] a growing consensus that rates will remain easy for the near-term, and less of a threat for gold," says a note from Japanese trading house Mitsui Global Precious Metals' team in Hong Kong.
 
But "unless incoming economic reports diverge substantially from projections," said US Fed policymaker Jeffrey Lacker in a speech Friday, "the case for raising [Dollar] rates will remain strong at the June meeting."
 
The pan-European FTSE Eurofirst 300 index of listed stocks today rose for a ninth consecutive week to join the Japanese Nikkei in touching fresh 15 year highs.
 
That still put Tokyo shares at half their all-time peaks of late 1989 however.
 
With the UK General Election now less a month away, the British Pound meantime sank to its lowest level since before the Conservative-led Coalition government took power in May 2010, falling over 1 cent to $1.46 after weaker than forecast manufacturing data.
 
That helped the gold price in Sterling jump 1.4% to reach 9-week highs above £825 per ounce – a record high when first touched on the day of the 2010 ballot.
 
Gold priced in Euros touched €1140 as the single currency fell below $1.06 – better than halving its 38% plunge of September 2012 to New Year 2014.
 
Euro gold price
 
Central banks worldwide last year cut their Euro holdings to just 22% of global FX reserves, new data from the International Monetary Fund said Friday, down from 28% a half-decade ago – before the currency zone's debt crisis.
 
"Most of the fall in the Euro share [of global reserves] represented outright selling," Bloomberg quotes Ray Attrill at National Australia Bank Ltd, rather than simply reflecting 2014's drop in the currency's FX value.
 
Surging bond prices today pushed yields on 8-year German Bund briefly below zero,  while the Dax index of German stocks has now risen 6.6% since the European Central Bank began its €60 billion-per-month quantitative easing asset purchases this time in March – but that gain drops below 4% in US Dollar terms.
 
Euro gold prices have risen 5.5%.
 
Now marking Good Friday on the Orthodox calendar meantime, the government of Greece yesterday repaid €450 million of bail-out loans on schedule to the IMF.
 
Athens now has 6 days to re-submit proposals for unlocking fresh bail-out loans from its Eurozone partner governments.

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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