-- Posted Thursday, 18 November 2010 | Digg This Article
| | Source: GoldSeek.com
London Gold Market Report
THE PRICE OF 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 to accept an EU rescue.
Global stock markets jumped, adding 1.5% to New York's S&P index at Thursday'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,” says Chu'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 per kilo.
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 several months. These have been very sticky investments so far."
But while "China has moved to become a net importer of silver, which is 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.
Adrian Ash
Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK's leading financial advisory for private investors, Adrian Ash is the editor of Gold News and head of research at BullionVault – winner of the Queen's Award for Enterprise Innovation, 2009 and now backed by the mining-sector's World Gold Council research body – where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.
(c) BullionVault 2010
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-- Posted Thursday, 18 November 2010 | Digg This Article | Source: GoldSeek.com
