Gold News

Gold Price Erases 'Safe Haven Gain' with Crude, Silver After Paris Terror Attacks

GOLD PRICE gains of almost $15 per ounce faded in London trade Monday, with the metal erasing what analysts and news-wires called "safe haven demand" after the weekend's terrorist attacks in Paris killed 129 civilians.
 
Western stock markets reversed their earlier drop, but US Treasury bond prices rose with the Dollar, edging the yield offered to new buyers lower again.
 
Ten-year US yields slipped to 2.25%, almost a quarter-point higher from this time last month but just below where they stood a year ago.
 
By mid-afternoon in London, the Dollar gold prices held at $1085 per ounce – barely $1 above where it ended Friday before the Paris atrocities began.
 
Crude oil gave back an earlier bounce from near-3 month lows, while silver prices tracked gold higher and lower, also erasing an earlier 1.4% rise in Asian and early London dealing which had reached $14.46 per ounce.
 
"The terror attacks in Paris sparked safe-haven demand" for gold, reports the Wall Street Journal.
 
"Investors sought safety in the metal following Friday's deadly attacks," agrees Reuters, with Bloomberg also saying that the terrorist attacks in Paris "spurred haven buying."
 
"Gold is clearly profiting from its reputation as a 'crisis currency'," said a note from Germany's Commerzbank this morning, pointing to the rise in Euro gold prices during Asian trade above €1020 per ounce – a move of 1.8% from Friday's finish.
 
"Safe-haven buying has taken gold higher this morning," agreed the Asian dealing-desk of Swiss refiner and finance group MKS, noting that Comex gold futures contracts – typically settled for cash, not metal – saw 11,000 lots change hands on the electronic Globex platform before China opened for business.
 
Half of Friday's very low volume, that equaled just less than 8% of last month's daily average turnover – itself down 14% from the same month last year.
 
Shanghai's official Gold Exchange then saw volume in its key gold contract rise sharply from Friday, nearly matching last Monday's 2-week high as Yuan gold prices edged 1.0% higher for the day.
 
Demand at the mid-morning London benchmarking auction, the LBMA Gold Price, jumped to 5.7 tonnes – the highest since late August, and almost 5 times the volume seen Friday – at an opening suggestion some $10 above Friday's price.
 
The LBMA Gold Price then settled almost $4 higher again to find a balance  between demand and supply, fixing at $1094.50 per ounce – the highest benchmark since Monday last week.
 
New trade data meantime showed former world No.4 consumer nation Turkey importing only 1.7 tonnes of gold last month, down almost 75% from a year before.
 
World No.1 consumer India – which had overtaken China's demand over the first 9 months of 2015 according to specialist analysts Thomson Reuters GFMS – showed a 60% drop in October imports by value, dropping to equal 45 tonnes at last month's average afternoon LBMA Gold Price.

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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