Gold News

Gold Prices Edge Higher as Nikkei Drops 10% for 2014, Safe-Haven Demand "Lacks Follow Through"

GOLD PRICES edged $5 higher to $1249 per ounce Monday morning in London, lagging a 0.6% rise in silver as world stock markets fell for the fourth day running.
 
Japan's Nikkei index ended Monday more than 10% below its start to last month, while India's Sensex lost 1.5% for the day.
 
The Borsa Istanbul rallied 0.4% but the Turkish Lira slipped again on the forex market.
 
Chinese markets stayed closed for the ongoing New Year holidays. But new data today put the country's manufacturing growth at a 6-month low, beneath analyst forecasts for January and close to stagnating.
 
Gold prices for UK investors rose 1.0% as the Pound fell suddenly to 2-week lows vs. the Dollar.
 
"Gold has benefitted from some degree of safe haven buying," says Jonathan Butler at Japanese conglomerate Mitsubishi.
 
"Investors [have] moved out of emerging market currencies, which have been pummeled by tapering expectations in recent weeks."
 
After pumping a record $352 billion into US stock markets in 2013, investors last week pulled $2.6bn from emerging-market mutual funds, according to Thomson Reuters' Lipper data.
 
But "In spite of the opportunity for gold to re-establish its safe haven role," says Swiss bank UBS, reviewing latest Commitment of Traders data from the US futures market, "[bullish traders] were clearly very reluctant to build positions" betting on higher gold prices.
 
"There has been no follow-through buying to augment the short-covering, with investors currently not fully convinced of the gold fear trade...[This] betrays the overall lack of interest in gold as an asset at the moment."
 
Greece, now defined as an "emerging market" by the MSCI index agency, is set to get a third bail-out from Euro currency-zone partners, reported Germany's Der Spiegel magazine on Saturday, citing a 5-page "position paper" leaked in Berlin.
 
Reputedly worth some €10-20bn, it would come on top of the €240bn already lent so far by the EU, IMF and Eurozone partners.
 
Gold prices for Euro investors rose to €927 per ounce, extending January's rise, the best monthly gain since July.

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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