The Gold Price slipped from new 5-week highs hit at the start of London trade on Friday, easing back from $1388 per ounce as silver edged down from its highest level since 7 March 1980.
European stock markets meantime fell together with government bonds after a senior Eurozone central banker said that record-low interests must "be monitored and, if needed, corrected."
Quoted by Bloomberg News, Italian ECB member Lorenzo Bin Smaghi is widely tipped to replace current president Jean-Claude Trichet when he steps down this autumn, following the departure of German "inflation hawk" Axel Weber.
Brent crude oil dropped further on Friday from its recent 30-month highs, cutting its premium over benchmark US prices to $14 per barrel from this week's record of $16.
Gold priced in Euros fell sharply from its best level since Jan. 19th at €32,900 per kilo.
"We're not inclined to view the gold price as being anywhere near the top," says Jamie Sokalsky, CEO of the world's largest Gold Mining producer Barrick, which today reported record-high fourth quarter profits.
Mark Cutifani of world No.4 miner AngloGold Ashanti now believes the Gold Price "could easily break above $1500 per ounce given issues across the globe."
AngloGold spent $2.64 billion last year buying back "hedge book" sales of future production, made to avoid losing money if Gold Prices fell.
Reports said 14 pro-democracy protesters were shot dead in the Libyan city of Benghazi on Thursday, and tens of thousands of people today attended the funerals in Bahrain of anti-government protestors killed this week in the Arab state – home to the US Navy's Fifth Fleet.
Egypt's interim military government confirmed it was considering a request from Iran for two unarmed warships to enter the Suez Canal.
"If you see violence, you would Buy Gold expecting that [investors in the Middle East] would buy gold," says German analyst Peter Fertig at Quantitative Commodity Research in Hainburg, speaking to Bloomberg.
Emergency lending by the European Central Bank meantime held overnight at the highest level since June 2009, jumping 13-fold this week to more than €16 billion on what some rumors – reported by the Reuters agency – said was a "fat finger" typing error, but others said were genuine funding problems in Eurozone banking.
Traders today told Bloomberg that the ECB seemed to be active in buying Portuguese bonds, driving down the government's cost of new borrowing from 7.5% as it faces more than €9 billion of maturing debt in 2011.
Beijing's central bank today raised the "reserve ratio" which Chinese banks must keep back from deposits, rather than lending on, for the fifth time in as many months in a bid to quell inflation.
Demand to Buy Gold in China "is vast. It's unbelievable," the Financial Times quotes a "senior banker not given to hyperbole."
"Whatever you think the demand is it's much bigger...I'm staggered" by the latest Gold Demand Trends data from the World Gold Council, he says.
Both the Austrian and Canadian Mints have begun rationing new silver coins to dealers, meantime, after record January sales across the retail industry.
"We have sold everything we can produce in silver and have demand for at least twice that volume," says the Royal Canadian Mint's head of sales, David Madge.
Silver Prices today jumped to fresh 31-year highs at $32 per ounce, outpacing the rise in gold prices more than 3 times over since the two metals turned sharply higher three weeks ago.
Gold Prices have risen 6.2% since Jan. 28th for Dollar investors. Silver has risen nearly 21%.
"Silver was completely out of hand" on Thursday, says one London dealer in a note.
"[It] currently appears to be starting a new leg higher," says technical analysis from bullion bank Scotia Mocatta, targeting a further 7% rise to $34 per ounce and more.
"The Gold Silver ratio has broken the 2006 low of 44.08" as silver has outpaced gold's gain, says Scotia. "The ratio is now 43.74 with risk for a continued move to 1998 low of 39.09" ounces of silver per 1 ounce of gold.
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