BUY GOLD prices fell hard in London trade Friday, following silver down to 5-week lows as world stock markets extended their run of new record highs following yesterday's break by New York's Nasdaq index of its March 2000 Tech Bubble peak.
Eurozone investors wanting to buy gold saw prices drop harder – despite fresh wrangling over Greece's bail-out loans from its Euro partners – as the single currency rose to 4-week highs against the Dollar.
Commodity prices meantime edged up towards 2015's starting level on the S&P GSCI index, while 10-year German Bund yields held at 0.15%, almost twice last week's new all-time low.
After seeing bids to buy gold outweigh offers to sell for a third time running at the
LBMA Gold Price Friday morning, the 3pm run of this newly electronic wholesale benchmark – launched in March to
replace the century-old Gold Fixing – met supply 40% greater than demand at $1183 per ounce.
Spot gold prices, quoted by major dealers to their individual counterparties, then fell to average $1178 inside 5 minutes, trading 2.1% beneath last Friday's finish and erasing the last of 2015's earlier 10% gain.
"A move below $1180," says a technical analysis from Swiss bank and bullion market-maker UBS, "open[s] further lows towards...the key support at $1142.94, the low of March 17."
"Physical interest from Asia ha[d] been supportive of gold this week," said a note earlier from the commodities team at Germany's Commerzbank.
But on Friday "price action within the precious complex during Asia was generally non-existent," counters Swiss refining and finance group MKS, reporting "little noticeable interest coming out of China."
Technically, Dollar gold prices had been "stuck in a range-bound configuration," says Societe Generale chartist Stephanie Aymes, "remaining in no-man’s land ahead of a [US Fed] rate decision" according to Standard Chartered analyst Nicholas Snowdon.
However, with US Treasury bond yields ticking lower again Friday, "Broad US economy returns over the cost of capital are in structural and cyclical decline," says a separate note from UBS commodities analysts, while "credit appetite is deteriorating.
"That will lead to a trend widening of spreads, deteriorating credit availability and uptake, slowing growth, and a new round of Fed reflation" –
conditions UBS says should be positive for demand to buy gold as well as for gold-mining shares.
Meantime in Riga, Latvia, a meeting of Eurogroup politicians to discuss Greece's ongoing bail-out loans from 2010 ended with Athens' finance minister Yaris Varoufakis saying his left-wing Syriza government is "willing to compromise" on imposing new economic reforms in return for extended terms.
Eurogroup chairman Jeroen Dijsselbloem told reporters "a comprehensive and
detailed list of reforms is needed" to release the last €7.2 billion in bail-out loans – which will not be offered beyond June.
