Gold News

Gold opens the week $10 higher, but trade thin as London closes for holiday

Spot Gold Prices held in a tight range early Monday, starting above a two-week high of $668 per ounce in very thin trade as the London bullion market – the center of world gold dealing – was closed for a British national holiday.

A speech by Jean-Claude Trichet, head of the European Central Bank, plus data showing sales of existing US homes in July were the only major economic events likely to affect forex and bullion trading.

For an overview of last week's action, read on for Chris Mullen's report from GoldSeek...

Spot Gold Prices spiked sharply higher to a 10-day high as the London bullion market closed on Friday, adding another $1 to its 1.1% gain by the finish in New York and ending the week as a whole 1.7% up against the US Dollar.

Silver spiked to about $12.00 by early afternoon before it backed off slightly into the close, but it still ended with a gain of 2.40% for the day.

The Gold Market rose over €488 for Eurozone investors, while the Sterling price of gold ended just shy of £332 per ounce, platinum gained $7 to $1,242, palladium lost $1 to $321, and copper added over 6 cents to about $3.40.

Gold and silver equities steadily rose throughout most of trade and ended with over 2% gains.

In the United States, Friday’s economic data came in better than expected, but most traders simply looked at July's Durable Goods orders – up 5.9% compared with 1.0% forecast – and July's New Home Sale, also strongly ahead of expectations, as old news. Both reports cover the period just before US credit problems hit nearly all world markets.

August’s data, due to come out in the weeks ahead, will be closely watched as all keep an eye on the Federal Reserve and its path for interest rates.

Next week’s economic highlights include Existing Home Sales on Monday; Consumer Confidence and the latest Fed meeting minutes on Tuesday; GDP, the Chain Deflator, Initial Jobless Claims, and the Help-Wanted Index on Thursday; and Personal Income and Spending, Core PCE Inflation, Chicago PMI, Factory Orders, and Michigan Sentiment on Friday.

Back in Friday's markets, crude oil followed gasoline higher on refinery problems in Texas and Mississippi. The US Dollar index fell despite the strong economic data as the Euro continued to rally on the view that the ECB will raise rates while the Fed may cut rates in the US.

Treasury bonds fell on the short end, as the markets remained relatively calm throughout the week. But longer-term securities did find slight gains to chip away at the steepness of the yield curve that developed over the past few weeks.

The yield on the 2-year US government note rose back above 4.25% at one point Friday, after dropping as low as 2.505% on Monday. The Dow, Nasdaq, and S&P rose throughout Friday's session, ending near their highs.

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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.

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