Gold rises ahead of four key events next week
Source: Sharps Pixley , Author: Austin Kiddle
Posted: Fri June 15, 2012 12:35 pm

INTERNATIONAL. Gold futures prices have gone up for 5 consecutive days, ending at UA$1,619.6 as of Thursday, up almost 1.8%. This morning in Asia, gold futures traded higher to US$1,625.

The S&P and the Stoxx went up 0.26% and 0.2% respectively, while the CRB Commodity Index fell 0.3% this week. The Dollar Index has continued to weaken, dropping 0.6%, while the Euro/Dollar went up 0.9% week-to-date.

This year, gold futures are up 3.4%, beating the performance of other "safe havens" such as the Dollar Index, which is up 2.3%, and the U.S. 7-10 year Government Bond, which is up 3.1%. Gold futures have underperformed the 10-year German Government Bond which has returned 3.9% this year.

However, German government bond prices have come under more pressure recently as the European debt crisis worsens - the Spanish 10-year government bond yield went up to 6.92% on Thursday after Moody's downgraded the country's credit rating 3 notches to Baa3, one level above junk-bond status. The rising borrowing costs could push Spain to request a full-blown sovereign bailout, with contagion to countries such as Italy, Portugal and France.

The soft economic data from the U.S. may suggest that the Fed will consider more quantitative easing measures when the FOMC meeting will take place on 19-20 of June, as rising gold prices seem to be implying. U.S. jobless claims rose by 6,000 to 386,000 last week, while the cost of living fell 0.3% in May. U.S. retail sales also dropped for a second month.

In India, gold futures of 99.5 percent purity continue to trade up, reaching an all-time high of 30,113 Rupee per 10 grams on Thursday. Gold futures rose 10% year-to-date in India.

Rising excise duty and prices have dampened the gold Indians' gold demand; May imports of gold and silver fell 52% year-on-year. Nevertheless, long-term demand remains strong as Indians' gold holdings are estimated to be worth 50% of India's GDP, and gold is a vital part of an Indian family, according to a recent Morgan Stanley survey.

No matter what the outcomes of the 17 June Greek re-elections, the 18-19 June G20 Summit and the 20 June FOMC and MPC interest rate decisions will be, global efforts to combat the credit crisis seem to be rising, as well as the bid for gold.

This article is republished with permission from Sharps Pixley.

Click here for more information about Sharps Pixley.

© Copyright Sharps Pixley 2012

Please Note: This article is 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.


Long-term investors diversify into gold while markets ponder next move

Gold back above U$1,600, Italy may also need 'support'

More will join China and Australia in rate cutting, better gold price ahead?

Gold bounce awaits a rescue plan for the euro

Gold finally decouples from euro, stocks & commodities, still ends May sharply down

The pain in Spain hurts gold trading and price

The next BIG THING in gold: Possible purchase of 1700 tonnes gold

Gold trading in a vacuum, says Ross Norman

Central bankers bought more gold while European leaders kept talking

Drawing lessons from Gold-Dollar relationship in 2008 and 2009

Silver rally by no means over, could rise to US$100 - Dubai Precious Metals Conference

Central bankers leading the way on gold

A return to real money - gold and silver

Buffett is wrong on gold bubble, says Peter Schiff

James Rickards sees gold standard at US$7,000 per ounce in the face of a dollar collapse

Peter Schiff: Was 2011 the end of the gold rush?

Marc Faber, Jim Rogers clash over China and commodities, agree on gold



date:Posted: March 27, 2017
UAE. PwC issues new report jointly with the Global Manufacturing & Industrialisation Summit; The report outlines a roadmap for CIOs to manage the transformation of industrial companies to successfully adopt IIoT; Devising a digital strategy is key for manufacturers
date:Posted: March 27, 2017
UAE. The strongest growth rate for 2014-2015 in the region was led by Saudi Arabia and the UAE, according to a new report from The Boston Consulting Group.
date:Posted: March 27, 2017
UAE. As banks seek to be more competitive and enhance customer experiences, many look to transform their old legacy banking systems with more efficient new core solutions.
UAE. A recent study by The Boston Consulting Group found that, in 2016, GCC banks' revenues grew by 5.2%, down about 2 percentage points from 2015; The impact of the decline in oil prices has hit the banking industry; Profits declined by 3.2% for the first time since 2008.