Gold News

Gold drops to one-month low as German investors get raw deal

Gold bullion prices fell in the first-half of London trade on Wednesday, dropping below $670 for the first time in a month.

"Looking at technicals, I can see gold weakening from here," says a report from Michael Widmer, metals analyst at Calyon Corporate and Investment Bank.

"Looking at the macro-economic data from [Tuesday], I would also say that you have more reasons to believe that gold is going to tend weaker than stronger in the short term.

"[But] overall, I still believe that the fundamentals for the gold market are positive.

"We went up quite a lot in a very short period of time, so a period of consolidation is normal." (Get a longer-term technical analysis here...)

By the open on Wall Street, spot gold prices had dropped 0.7% from last night's US close to $669 per ounce.

The move compounded Tuesday's drop in gold prices, seen on stronger-than-expected business spending and sentiment data.

The US Dollar continued to bounce on the currency markets. Earlier today it Dollar rose above ¥120 against the Japanese currency.

It also pushed the Euro more than a cent off its all-time high of last Friday, down to £1.3580. (Can the Euro cling onto its recent highs? Find out here...)

"The Dollar strength is pressuring gold prices," reckons Daniel Vaught, a commodity analyst at AG.Edwards in St. Louis.

"Everybody who's bearish of the Dollar has taken their positions, so inevitably the market has to bounce."

Price in Pounds Sterling, gold for British investors began today's afternoon session in London at £335.75 per ounce – also a one-month low.

Just below at £335 sits the uptrend for gold in Sterling beginning last October.

Versus the Euro gold prices fell below €492 for the first time since mid-March – dampening the recent launch of LyxOr's new Exchange Traded Gold (ETG) still further.

Today's Frankfurter Allgemeinen Zeitung carries a puff piece for the note. Based on the same model as StreetTracks GLD and LyxOr GBS, it certainly makes buying and selling easier for ordinary investors in Germany.

But does it offer German citizens the opportunity to own physical gold bullion outright? Can they trade it 24 hours a days a week?

And will German investors – now facing new controls on carrying more than €10,000 in cash beyond the European Union's borders – enjoy the ability to hold their gold in a secure and professional vault in Zurich, Switzerland?

Just like you, they could enjoy all these benefits – investing in gold bullion at the lowest cost possible – by visiting now...

Adrian Ash

Adrian Ash, BullionVault Gold News

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.

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



Market Fundamentals