London Gold Market Report
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
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
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.
Head of Research
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