wildcard
1st May 2010, 04:57 PM
link (http://www.theaustralian.com.au/business/mining-energy/gold-hits-2010-high-on-europe-worries/story-e6frg9do-1225860889543)
Gold hits 2010-high on Europe worries
* Allen Sykora
* From: Dow Jones Newswires
* May 01, 2010 8:46AM
A CONTINUED flight to safety amid European debt worries sent gold to its highest level of the year this morning, with some looking for the precious metal to eventually push back to the record highs hit in early December.
June gold, the contract month with the most open positions, rose $US11.90, or 1.02 per cent, to settle at $US1180.70 an ounce on the Comex division of the New York Mercantile Exchange. Lightly traded but nearby May climbed $US11.70, or 1 per cent, to $US1180.10.
"We're seeing the safe-haven element of gold, over the last several weeks, continue to play a major role in the move higher," said Dave Meger, director of metals trading at Vision Financial Markets.
The financial markets' main focus has been Greece, but there are worries about other nations as well, particularly after Standard and Poor's downgraded the sovereign credit ratings of Greece, Portugal and Spain this week.
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In recent weeks, gold often has broken its traditional inverse relationship to the US dollar.
"But the dollar is a little bit weaker today. So that might have encouraged just a little bit more buying," said Caesar Bryan, GAMCO Gold Fund (GOLDX) portfolio manager.
The euro was helped by hopes that details of a bailout for Greece will be announced soon, in turn helping gold, said George Gero, vice president with RBC Capital Markets Global Futures. A softer US dollar often leads to buying of gold as a hedge, plus it makes commodities in general cheaper in other currencies.
Buying also came from managed-futures funds due to momentum-based factors such as a rising number of open positions, good volume and the recent rise in prices, Mr Gero said. Furthermore, with yesterday the last day of the month, some fund managers may want to show they hold long positions in gold when clients receive statements, he added.
But mostly, it's the worries about sovereign debt -- and not moves in currencies -- that are the main catalyst driving gold at the moment, Mr Bryan said. In particular, investors are jittery that Greece's problems will be cropping up in other nations.
"There is a feeling that although Greece is small in terms of GNP (gross national product), is it the canary in the coal mine?" Mr Bryan said.
He looks for gold to eventually break its early-December record high, which was $US1227.50 for the benchmark Comex futures. "I don't think these debt issues are going to go away," Mr Bryan said.
June gold peaked at $US1182.50, is strongest level since December 4.
Vision Financial's Meger put the next resistance at the psychological $US1200 level. He pegged initial support for June gold at $US1160, then $US1140.
The other precious metals also finished higher.
These fell earlier in the week on risk aversion after the S&P downgrades of some European credit ratings. However, they have bounced since, with silver benefiting from the improved tone in the euro, Mr Gero said. Still, Mr Meger pointed out, silver also was held back by the softer tone in the stock market.
July silver rose US6 cents, or 0.32 per cent, to $US18.639. Mr Meger put resistance for July silver around $US18.90 to $US19, then $US19.50. He put support near $US18.40, then $US17.80.
July platinum settled up $US11.40 or 0.66 per cent, to $US1745.10 an ounce. June palladium rose $US6.75, or 1.23 per cent, to $US555.75. These got an added lift from expectations the global auto sector will keep improving, which means more demand for the metals by the auto sector for catalytic converters, Mr Gero said.
Gold hits 2010-high on Europe worries
* Allen Sykora
* From: Dow Jones Newswires
* May 01, 2010 8:46AM
A CONTINUED flight to safety amid European debt worries sent gold to its highest level of the year this morning, with some looking for the precious metal to eventually push back to the record highs hit in early December.
June gold, the contract month with the most open positions, rose $US11.90, or 1.02 per cent, to settle at $US1180.70 an ounce on the Comex division of the New York Mercantile Exchange. Lightly traded but nearby May climbed $US11.70, or 1 per cent, to $US1180.10.
"We're seeing the safe-haven element of gold, over the last several weeks, continue to play a major role in the move higher," said Dave Meger, director of metals trading at Vision Financial Markets.
The financial markets' main focus has been Greece, but there are worries about other nations as well, particularly after Standard and Poor's downgraded the sovereign credit ratings of Greece, Portugal and Spain this week.
Start of sidebar. Skip to end of sidebar.
End of sidebar. Return to start of sidebar.
In recent weeks, gold often has broken its traditional inverse relationship to the US dollar.
"But the dollar is a little bit weaker today. So that might have encouraged just a little bit more buying," said Caesar Bryan, GAMCO Gold Fund (GOLDX) portfolio manager.
The euro was helped by hopes that details of a bailout for Greece will be announced soon, in turn helping gold, said George Gero, vice president with RBC Capital Markets Global Futures. A softer US dollar often leads to buying of gold as a hedge, plus it makes commodities in general cheaper in other currencies.
Buying also came from managed-futures funds due to momentum-based factors such as a rising number of open positions, good volume and the recent rise in prices, Mr Gero said. Furthermore, with yesterday the last day of the month, some fund managers may want to show they hold long positions in gold when clients receive statements, he added.
But mostly, it's the worries about sovereign debt -- and not moves in currencies -- that are the main catalyst driving gold at the moment, Mr Bryan said. In particular, investors are jittery that Greece's problems will be cropping up in other nations.
"There is a feeling that although Greece is small in terms of GNP (gross national product), is it the canary in the coal mine?" Mr Bryan said.
He looks for gold to eventually break its early-December record high, which was $US1227.50 for the benchmark Comex futures. "I don't think these debt issues are going to go away," Mr Bryan said.
June gold peaked at $US1182.50, is strongest level since December 4.
Vision Financial's Meger put the next resistance at the psychological $US1200 level. He pegged initial support for June gold at $US1160, then $US1140.
The other precious metals also finished higher.
These fell earlier in the week on risk aversion after the S&P downgrades of some European credit ratings. However, they have bounced since, with silver benefiting from the improved tone in the euro, Mr Gero said. Still, Mr Meger pointed out, silver also was held back by the softer tone in the stock market.
July silver rose US6 cents, or 0.32 per cent, to $US18.639. Mr Meger put resistance for July silver around $US18.90 to $US19, then $US19.50. He put support near $US18.40, then $US17.80.
July platinum settled up $US11.40 or 0.66 per cent, to $US1745.10 an ounce. June palladium rose $US6.75, or 1.23 per cent, to $US555.75. These got an added lift from expectations the global auto sector will keep improving, which means more demand for the metals by the auto sector for catalytic converters, Mr Gero said.