PRICES to buy gold
with Dollars rallied from their lowest levels since late August on Wednesday
morning in London, recovering 0.7% from yesterday's drop to $1662 per ounce.
The drop came as Greece was upgraded Tuesday by the S&P ratings agency
from "selective default" to "junk" status, following
payment of the latest €34.3 billion in new loans from Greece's Eurozone
Versus the Dollar the Euro leapt to its highest level since May. The gold
price for Eurozone investors sank to €1255 per ounce – a 6-month
low almost 10% beneath October's new record high.
"Gold on any kind of historic market basis is overdue for a nice
correction," CNBC was told by investment author and commodities-fund
manager Jim Rogers overnight.
"It's been correcting for 15-16 months now, which is normal in my view.
It's possible that gold's correction is going to continue for a while
Tuesday saw a switch from January to February contracts in a large number of
short (ie, bearish) bets on the gold price held by
leveraged speculators in the US derivatives market.
Holdings at physically-backed gold trust funds traded on the stock market
rose to new all-time records, according to Bloomberg.
Users of BullionVault also moved to buy the drop in
prices, with previously quiet trade growing strong as gold fell Tuesday.
"Good support is seen at $1672.50 [and then] $1661.64," says
Commerzbank's Axel Rudolph in Frankfurt in his weekly chart analysis.
"Failure at [those levels] would push the June high at $1641.01 back to
the fore and neutralise our bullish outlook.
Silver prices meantime bounced off a 6-week low at $31.40 per ounce Wednesday
morning, as world stock markets reached 17-month highs on Reuters' data.
Long-dated US bonds also ticked higher, nudging 30-year Treasury yields back
below 3.00% per year.
Republican speaker Boehner meantime referred to a "Plan B" for
$1-million earners in the ongoing argument over
2013's looming fiscal cliff.
A blog on The Economist website says
Democrat president Obama has agreed to switch the Consumer Price Inflation
index tracked by Social Security payments to a lower measure, resulting in
slower benefit rises.
Over in Japan, a small but growing number of pension funds are buying gold as
a hedge against zero-bond yields and the long-term decline in equities, says
a report in today's Wall
"By diversifying currencies, we aim to reduce risks associated with
them," the WSJ
quotes Yoshi Kiguchi, chief investment officer at
Okayama Metal & Machinery Pension Fund.
It began investing in gold this March on behalf of the 260 small and
mid-sized company pension schemes it runs.
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