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Gold Price Defies 2015 Dollar Surge & Crude Oil Drop, Hits Multi-Month Highs vs. Euro, Sterling, Franc and Aussie

Tuesday, January 6, 2015 7:44

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Adrian Ash is head of research at BullionVault, the world-leading gold trading & ownership service online…

GOLD PRICE gains of 1.5% already in 2015 were extended Tuesday in London, with Dollar prices twice touching 3-week highs at $1214 per ounce despite the US currency surging again on the FX and commodity markets.

The Euro hit new 9-year lows, and US crude oil contracts fell below $50 per barrel for the first time since 2009.

Gold priced in Euros and Swiss Francs hit the highest levels since September 2013, while UK and Australian investors saw the price hit 10-month highs.

Silver rose faster, gaining 5.2% for Euro investors so far in 2015.

“There is a bit of talk about safe-haven buying,” Reuters quotes one gold trader, “given the spike in uncertainty regarding the future of the Eurozone.”

The SPDR Gold Trust (NYSEArca:GLD) added 1.5 tonnes of gold to back its shares on Monday from the new 6-year low hit Friday at 709 tonnes.

Silver largest ETF, the iShares Trust (NYSEArca:SLV) meantime shed a further 5 tonnes however as investors sold and reduced the outstanding number of shares to the lowest level since August at 10,245 tonnes.

Facing a loss on bearish bets against gold for December, speculators in cut their short position and raised their bullish bets in the week-ending last Tuesday, delayed data showed yesterday.

The net long position of speculative traders in US Comex gold futures and options grew to the equivalent of 408 tonnes by 30 December – twice as large as the speculative net long at end-2013.

US derivatives exchange group the CME today said it will launch a 1-kilo gold futures contract in Hong Kong on 26 January, claiming it will “provide price discovery in this key Asia bullion trading hub to market participants around the world, virtually 24 hours a day.”

“Gold surprisingly firm,” says South Africa’s Standard Bank, whose commodities unit is being bought by China’s ICBC.

“Given stronger USD, lower yields, lower oil and lower inflation expectations; it does not make sense for gold to be up here.”

On the contrary, says investment bank and London market maker HSBC, “The ability of gold to track higher…may mean investors are beginning to view EUR-USD and/or oil declines as disorderly, prompting safe haven buying in gold.

“Another explanation is that equity-price declines were significant enough to promote more than offsetting flight to quality buying in gold [which should] tend to favor further gold gains.”

Western stock markets stabilized Tuesday after shedding 1.5% yesterday, but Japan’s Nikkei dropped another 3%, as did India’s Sensex after government borrowing data said New Delhi has hit its full-year deficit target in just 8 months.

Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK’s leading financial advisory for private investors, Adrian Ash is the editor of Gold News and head of research at BullionVault – winner of the Queen’s Award for Enterprise Innovation, 2009 and now backed by the mining-sector’s World Gold Council research body – where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

Please 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 it.

Source: https://www.bullionvault.com/gold-news/gold-price-010620155

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