Gold News

Gold & Silver Prices Rise vs. Dollar, Near Strong First-Quarter Finish for UK & Euro Investors

Gold and Silver Prices rose against a weakening US Dollar in London on Wednesday morning, pushing higher as Asian shares ended the day lower and European stock markets held flat.

"A close above $1097 today will give gold its sixth consecutive quarterly gain," says the daily note from Mitsui's London team.

"Silver fixes higher in Europe, gold firm," says a Reuters headline, repeating Tuesday morning's news.

"Spot Gold in Euros remains well bid and did not even [dip to] our previously forecast €800 support region," writes Axel Rudolph, technical analyst at Luxembourg's Commerzbank, in his latest weekly report.

Staying "short-term bullish" on silver, "We remain medium-term neutral as long as the Silver Price remains contained within its three month resistance line at 17.97 and the 15.59 late-Feb. low," says Rudolph.

Adding 7.7% against both the Euro and Pound Sterling since the start of Jan. 2010, the Gold Price today rose above $1110 per ounce for Dollar investors.

Silver today came within 10 cents of a 10-week high at $17.61 per ounce, some 4.1% higher from the first-quarter's start.

"Whenever Gold falls we see good physical buying coming in," the Reuters newswire quotes one Europe-based trader.

"Even on the private customer side, there's pretty good demand for coins and bars."

New data meantime said on Wednesday that private-sector employers in the United States shed 23,000 jobs last month.

Official non-farm data is due when the European, London and New York markets are closed for Good Friday.

Unemployment rose to 10.0% in the Eurozone in Feb., Brussels reported – the first double-digit rate since mid-1998 – as analysts expected.

Consumer prices rose faster than forecast this month, however, adding 1.5% from this time last year across the 16-nation currency union.

Ten-year German Bund yields dropped to 3.10% as the Dax stock index struggled to break-even on the day.

Ten-year UK gilt yields dropped back through 4.00% as prices rose.

"When investors start to fear an increasing chance of default because the government's finances don't make any sense and they price that default into bond yields, it looks like Latvia," writes Berkeley professor Brad De Long today.

De Long contrasts the Baltic state's 14% long-term bond yields with 10-year US Treasuries, offering 3.86% early on Wednesday morning.

"That is not – repeat NOT – REPEAT NOT!! – what we see in the US. Not at all. We have $3 trillion more of US government debt held by the public than we did two years ago, and lower long-term interest rates."

Tuesday saw the yield on 7-year Treasury bonds follow 10-year US yields, however, in rising above open-market interest rates for non-government borrowers.

Such "swap" rates have been negative on UK government bonds since early March.

"It's all about relative Government bond supply," says a note from Jim Reid at Deutsche Bank in London, adding that "government [debt] issuance is likely to remain high for as far as the eye."

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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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