Gold News

Gold recovers $3 but seen in "range" around $650 per ounce

Physical gold bullion prices ticked 0.4% higher during Asian and early European trade on Monday, opening New York $3 higher from Friday's close.

"There is still potential we feel for a further downward correction," says today's note from Standard Bank, "as investment funds continue to assess the implications of potential US Dollar strength on the back of a tighter US monetary policy.

"But many [players] may wish to hold the range in gold between $645 to $660 until more significant inflation-related data comes out – both the CPI and PPI – towards the end of this week."

Gold priced in Sterling recovered to £331.60 per ounce, but that remained the lowest weekly opening since January.

For French and German investors wanting to buy gold today, it rose above €488.50 per ounce.

That put gold priced in Euros more than 0.8% up from Friday's Wall Street close.

The European single currency remained near its own 10-week low versus the Dollar – as did the Pound Sterling – on the foreign exchanges.

The New Zealand Dollar today sank 1.5% from a two-decade high against the US Dollar on strong intervention in the markets by the Reserve Bank of New Zealand.

After raising interest rates to a record high in a bid to curb inflation and a house-price bubble, the New Zealand central bank now wants to cap the "carry trade" that sees global investors selling low-yielding currencies such the Japanese Yen to lock in easy profits from higher-yielding assets.

Indeed, it was the rising cost of cheap that sparked Friday's sharp decline in the gold market.

Stocks, bonds and foreign currencies also sold off fast as 10-year Treasury yields rose above 5% for the first time since August '06. (Click here for more on the bond market panic...)

"Last week's decline in gold surprised analysts surveyed May 31 and June 1, who had predicted a gain," reports Bloomberg today.

Its latest survey finds professional gold analysts and traders tracking the gold price, as ever.

Ten are bullish, while 17 recommend selling the metal and 9 are undecided.

"Bloomberg's survey has forecast prices accurately in 99 of 163 weeks, or 61 percent," says the newswire.

If you'd like to buck the consensus – or simply learn more about buying physical gold bullion today – click through to www.BullionVault.com.

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.

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