Gold News

Gold Investment 'Less Attractive' as Failing Greek Talks 'Don't Matter', Silver ETF Grows as GLD Shrinks to 2008-Crisis Size

GOLD INVESTMENT prices slipped further for Dollar and Euro investors in London trade Thursday, briefly spiking after new US data showed stronger-than-forecast retail sales for May but a surprise jump in the number of people claiming jobless benefits last week.
 
Major Eurozone stock markets meantime added over 1% as government bond prices fell again.
 
Dollar gold prices for wholesale investment bars then fell back through the $1180 per ounce level, seen by technical analysts as 'support' from late March to last week.
 
Gold priced in Euros held 1% above this week's new 5-month low of €1037.
 
UK savers wanting to make a gold investment saw the price in Sterling fall to 4-week lows beneath £760 per ounce.
 
"As investor confidence in global financial stability increases, so does risk appetite," says a new report on gold's investment appeal from French bank and bullion dealer Natixis.
 
"Hence the role of gold as a safe haven has become significantly less attractive, even for risk-averse investors."
 
Both the Bloomberg and Reuters news-wires note that the giant SPDR Gold Trust (NYSEArca:GLD) – the world's largest ETF by value at its 2011 peak – ended Wednesday needing less bullion to back its shares than any time since September 2008, just when the failure of US investment bank Lehman Brothers marked the steepest phase of the global financial  crash.
 
Neither however note that the iShares Silver Trust (NYSEArca:SLV) again added bullion to its backing yesterday, expanding more than 3% from late-May's 12-month lows to need 10,168 tonnes of metal.
 
Users of BullionVault, the world's No.1 physical gold and silver investment provider online, this week grew their aggregate gold holdings to a record 34 tonnes and added another 1.5 tonnes of silver to own 506 tonnes in total.
 
Greek bond yields meantime continued their uptrend Thursday, spiking to late-May's 1-month highs at 11.88% as Athens' debt prices fell but holding more than one percentage point beneath April's 2.5-year peak.
 
Now due to collect €1.6 billion from Athens on the last day of June, the International Monetary Fund said its negotiation team today left talks in Brussels without making any progress.
 
"The ball is very much in Greece’s court," said IMF spokesman Gerry Rice in Washington, repeating the phrase already used twice this week by Eurozone officials.
 
Greece's top administrative court, the Council of State, today ruled that pension cuts made in 2012 breached both the country's own Constitution and the European Convention on Human Rights, and should be reversed.
 
"Greece, with the greatest of respect to those good people," is an irrelevance within the precious metals markets," says David Govett in London at brokers Marex Spectron – reportedly now up for sale after returning to profit in 2014.
 
With gold investments "little use as a hedge against global problems," says Govett, "The metals are being infuenced purely by the Dollar and Fed announcements."
 
The Federal Reserve's policy team meet next Tuesday and will announce any change to rates – now held at 0% since early 2009 – the next day.

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.

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

 

 

scri

Market Fundamentals