Gold News

Gold Recovers Half of Week's Loss as Euro, Silver Prices, Commodities & Global Equities Jump Ahead of Irish Bail-Out

Spot Gold recovered half of this week's 3% drop by the start of New York trading on Thursday, briefly touching $1355 per ounce as the Euro currency jumped vs. the Dollar on news that Ireland is about toaccept an EU rescue.

Global stock markets jumped, adding 1.5% to New York's S&P index atThursday's opening, while commodity prices rose up to 2%.

The Silver Price extended its rally to almost 7% from Tuesday's two-week low, trading above $26.50 per ounce.

The [gold and Silver Bullion ] market was practically one-way traffic” in early trade, according to an Asian broker.

People expect the Dollar to further deteriorate, which gives a strong incentive to Buy Gold," said Ellison Chu of Standard Bank, also in Hong Kong, to Reuters.

"They are building up another round of long positions."

Buying interest in the physical market is also supporting gold,” saysChu's Standard Bank colleague in London, Walter de Wet, “mostly as the result of Indian buying in anticipation of seasonal jewellery demand (the wedding season).

After the recent falls, prices are looking more attractive to physical buyers of gold.”

On the forex market Thursday, the Euro rose more than 2¢ after Ireland's central-bank chief Patrick Honohan told Dublin radio that the Republic will accept a "very substantial loan" from its European Union partners.

The British Pound also reversed this week's drop, rising back above $1.60 and capping the Gold Price in Sterling below £850 an ounce.

The Gold Price in Euros failed to hold a brief spike above €32,000 perkilo.

Euro Silver Prices rose to fresh highs for the week, but held more than 8% below last Tuesday's record highs.

Silver is almost like a leverage play on gold for some investors," said GFMS chairman Philip Klapwijk at the annual Silver Institute dinner in New York last night.

There's been a tremendous run-up in silver ETF holdings over the past severalmonths. These have been very sticky investments so far."

But while "China has moved to become a net importer of silver, whichis a significant development...silver mine production [unlike Gold Mining output] has been growing over the last decade.”

Palladium prices meantime leapt 7% in London today after refiner Johnson Matthey said that depleted Russian stockpiles could mean the market will be "substantially in deficit" for several years to come.

Buying Gold or physical Silver Bullion today...?

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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