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Gold jumps as nerves ease over Greece
By resourceINTEL · February 16, 2010 · 11:48 pm · Leave a Comment
GOLD prices rallied today as calmed nerves about the Greek sovereign debt situation prompted investors to take riskier bets.
Participants were selling the perceived safety of the US dollar and moving into gold, silver, platinum and palladium, as well as equities and other commodities, on news that the European Union and the International Monetary Fund will closely monitor Greece’s attempts to narrow its budget deficit.
April gold rose $US29.80, or 2.7 per cent, to settle at $US1119.80 an ounce on the Comex division of the New York Mercantile Exchange.
Comex March silver jumped US70.1 cents, or 4.5 per cent to $US16.148. Nymex April platinum gained $US26.60, or 1.8 per cent, to $US1537.70 while March palladium on the exchange added $US14.30, or 3.4 per cent, to $US432.45 an ounce.
“What we have is a relief rally,” said Country Hedging analyst Sterling Smith.
KEY COMMODITY PRICES: oil, gold, base metals, livestock and wheat
The jump in gold prices was a continuation of speculative and investment buying sparked by a recent pullback in the metal, said Stephen Platt, analyst with Archer Financial Services.
“Investors are returning to risk right now,” said Bob Haberkorn, senior market strategist with Lind-Waldock.
While traditionally viewed as a safe-haven investment, gold in recent months has come to be seen as a risk play along with high yielding currencies and stocks. This shift has been fuelled in part by low interest rates and easy monetary policy that have encouraged investors to move money out of cash.
Shortly after gold closed, the ICE Futures US dollar index was down 0.673 points, or 0.8 per cent, at 79.659 points. The Dow Jones Industrial Average was up about 1.2 per cent.
In addition to the inverse link between gold as a current risk play and the US dollar as a safe-haven investment, US dollar weakness also tends to support demand for US dollar-denominated gold by making the metal less expensive for purchasers using other currencies…read more at The Australian
