Gold News

Gold Trading Holds $1200 as Euro Slips Amid Fresh Greek Wrangling, Shanghai Shares Sink 6%

GOLD TRADING in London on Friday saw Dollar prices hold above $1200 per ounce as the US currency rose against the Euro ahead of an emergency summit called for Monday to try and resolve the worsening Greek debt crisis.
 
With reports saying a further €1.2 billion was withdrawn today by Greek depositors from the nation's banks – adding to the €3bn already moved this week – "Emergency central bank funding has replaced fleeing deposits," says Bloomberg, charting European and Greek central-bank inflows to domestic institutions.
 
The ECB today extended its emergency liquidity assistance to Greek banks, Reuters reported.
 
"This is not a game and there is no time for any games," said president of the European Council Donald Tusk.
 
Euro gold traders today saw the price rise to two-week highs near €1065 per ounce, gaining 1.5% for the week as the single currency eased back on the FX market.
 
Gold trading volumes in Shanghai had earlier jumped to the highest level in 5 weeks as Yuan prices crept higher but the discount to comparable London quotes closed at more than $2 per ounce.
 
"The Chinese [have been] very light buyers" this week according to traders at Swiss refining and finance group MKS.
 
An update from London's benchmark gold price administrators ICE today said the state-owned Bank of China will begin acting as a direct participant from Monday.
 
Shanghai's stock market meantime dropped 6%, capping the worst week for mainland Chinese shares since 2008.
 
For Dollar gold traders, Thursday was "the first time in 17 trading sessions we have closed above the 21-day moving average," noted bullion bank and London market maker Scotia Mocatta, calling the finish above that $1198 level "a bullish development."
 
Greece's ruling Syriza party meantime called for anti-austerity protests in  Athens on Sunday, with ministers and officials accusing foreign creditor states of "scaremongering" and spurring a new run on the country's banks.
 
"These tactics facilitate creditors who want to further blackmail the Greek government," one official said. "Greece won’t be blackmailed."
 
ECB board member Benoit Coeure said as talks broke down Thursday night that Greek banks may not be able to open on Monday.
 
"New loans for failed policies – the current joint creditor proposal – is, for [Greece], no adjustment at all," says US professor James K.Galbraith in a blog.
 
"The Greek government is right to have drawn the line. It has a responsibility to its citizens," agrees Jeffrey Sachs, a professor at Columbia University and special adviser to the United Nations.

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.

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