Tags: Gold | Euro | China | Worries

Gold Jumps to Two Week High on Euro, China Worries

Tuesday, 01 Jun 2010 07:17 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Gold climbed to its highest level in almost two weeks on Tuesday in Australia after warnings from the European Central Bank and China over the global economic outlook sparked fresh safe-haven buying.

Reuters' technical analysis suggests gold could advance a further $6 to $7 to trade closer to its May 14 record of $1,248.95 an ounce as upside momentum builds.

Gold traded at its highest since May 19, up after news that China's official purchasing managers' index (PMI) fell to 53.9 in May from 55.7 in April, just under analysts' forecasts of 54.0.

The decline was enough to turn more investment to bullion despite the data showing that for the 15th straight month, the official PMI stood above the threshold of 50 that demarcates expansion from contraction.

"Since the start of the problems in Greece and Spain, gold's become ultra-sensitive to unfavorable economic news," a metals dealer in Sydney said."This should keep up the support today."

Another dealer said gold's fresh surge could bump up already record-high exchange-traded gold-backed securities, once the United States and Britain return from a three-day weekend later on Tuesday.

Data from the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust (GLD), shows its holdings unchanged at a record 1,267.930 tons as of May 28.

Spot gold climbed $8 to $1,222.20 an ounce versus the last notional close, the highest price since May 19, according to Reuters data before recoiling slightly.

U.S. gold futures for August delivery were up $6.70 at $1,221.70 an ounce from the previous day.

The European Central Bank warned Monday that euro zone banks face potential loan losses of up to 195 billion euros ($236.89 billion) over the next 18 months due to the financial crisis, and disclosed it had increased purchases of euro zone government bonds.

The warnings came after China had cautioned that the global economy remained vulnerable to sovereign debt risks. Also, despite Monday's market holidays in the United States and Britain, bullion found some added support as it became evident that global market turbulence over the euro zone debt crisis had hit Argentine bond prices, which fell 5.4 percent on average in May.

The U.S. dollar was steady in thin trade on Tuesday, while oil edged higher, running contrary to weaker Asian equities.

© 2014 Thomson/Reuters. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved