By From Adrian Ash
Hits New Euro & GBP Records as Silver Gains 6% in Thin Holiday Trade
THE PRICE OF GOLD held above $1400 per ounce for Dollar investors in London trade on Wednesday morning, gaining more than 24% from the start of 2010 despite this year’s strong recovery in the US currency’s forex value.
Asian stock markets recovered from yesterday’s 1% drop – sparked by China’s Christmas Day rate hike to 5.8% on bank loans – but European stock markets held flat on their first full return from the festive break.
The silver price meantime extended this week’s jump to 5.9% vs. the Dollar, rising back above $30 per ounce for the second time this month.
“Volumes will likely remain light until after the holiday season,” says bullion bank Scotia Mocatta in its latest technical analysis.
“In the big picture, we remain near the upper end of the year’s $1045 to $1430 range” for the Dollar gold price.
“We’re going to probably trade off currencies, the Dollar index is still lower, that’s supporting gold this morning,” Reuters quotes Andrey Kryuchenkov at VTB Capital.
The single European Euro currency today whipped around $1.31, nearing the end of 2010 some 9% lower from New Year’s Day against the Dollar.
The gold price in Euros broke fresh all-time highs overnight in Asian trade, hitting more than €34,500 per kilo – some 38% higher in 2010.
The British Pound meantime rallied from its lowest level to the Dollar since early Sept., pulling the gold price in Sterling back down from its own new record high above £916 per ounce, also hit overnight in Asian trade.
Noting both the new 2010 highs in palladium and a sharp rise in silver prices, “There is surely some year-end posturing with most of the market asleep and liquidity very thin,” says Japanese metals conglomerate Mitsui’s London team, “but reality is that…should the expected inflows come early next year this could just be the beginning of something bigger.
“The Chinese Christmas rate change has done little to dampen the market thus far.”
European government bonds meantime ticked lower but US Treasury prices rose, nudging interest rates lower.
US crude oil contracts slipped back below $91 per barrel.
Adrian Ash
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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.
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