Gold News

Gold Price 'Rangebound' as US Confirms Q1 Slowdown, Urges Eurozone Not to 'Wait' on 5-Year Old Greek Crisis

GOLD PRICE losses of 1.3% for the week held little changed in London on Friday, despite a drop in the Dollar following a new estimate showing the US economy shrank 0.7% in the first 3 months of the year.
 
New data from debt-stricken Greece showed bank deposits shrinking to a 10-year low last month, as US Treasury Secretary Jack Lew urged Eurozone leaders to resolve the 5-year old crisis without "waiting" for it to worsen.
 
Market measures of so-called 'contagion risk' from a Grexit have fallen, notes London-based consultancy Capital Economics, seemingly "complacent [and] supporting the view that an escalation of the Greek crisis would be another positive for gold."
 
The Dollar gold price crept up Friday afternoon in London to $1192 per ounce as US stock markets tracked a drop in European shares to open the day lower.
 
Silver tracked the gold price, also rising from near 2-week lows to $16.80 per ounce.
 
The Dollar dropped to its lowest level of the week against the Euro near $1.10 after the second estimate of US GDP also confirmed a 0.1% annualized drop in the domestic price level.
 
"The price of gold has fallen from $1232 to $1180 over the past two weeks," notes a technical analysis from bullion bank Scotia Mocatta.
 
"We had been bullish the metal while it held above $1200...[but while] momentum is currently to the down side, in the big picture the metal has been a sideways trade the past two months."
 
"After the rout to the downside," agrees Swiss refining and finance group MKS's trading desk, "the market looks set to continue to trade in a 1180-1195 range.
 
However, "a break to the downside [is] looking more likely in line with the surging USD."
 
Over in major gold consumer market India, meantime, "Rupee gold prices are trading at a discount of $3-4 per ounce for the first time in 2015," says a note from precious metals specialists Metals Focus, adding that local silver prices are also trading at a slight discount  to the global benchmark of London quotes.
 
Unlike Indian gold demand – now entering a seasonal lull with Hindu festival calendars, ending with the late-summer restart of weddings – "Lower silver prices have led to an up-tick in demand for silver jewellery, as well as silverware," says Metals Focus.

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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