Gold Holds Strong Amidst Developments in Eurozone
Gold is holding strong in the course of protests and confusion in the Eurozone. Gold Holds Strong Amidst Developments in Eurozone is seen to keep going uphill as Central Banks continue with the pro-stimulus bullion trends.
Furthermore, a growing number of countries are upping their gold reserves by the tonnes showing renewed support for this precious metal. In the wake of this positive move, we can see private sectors doing the same. And it has been said before that this upward movement of the gold trend is far from over.
Here is the report from Reuters.
Scenes of large-scale protests against anti-austerity measures in Spain rekindled fears about the region’s three-year-old debt crisis. European Central Bank President Mario Draghi offered a vigorous defense of the ECB’s bond-buying plans and said it was now up to governments to follow with decisive policy steps of their own.
Gold is still 4 percent higher for September following a sharp rally on hopes the central banks will keep the credit flowing by offering bullion-friendly stimulus.
“Gold is likely to continue to consolidate. Maybe a shoe drops over in Europe and that knocks gold prices which are overbought at these levels,” said Phillip Streible, senior commodities broker at futures brokerage R.J. O’Brien.
Traders said that some disappointed futures investors sold as current prices were over $30 or 2 percent below the popular $1,800 call strike at the U.S. COMEX October gold option expiration at end of business Tuesday. (COMEX options interest: link.reuters.com/xaj82t)
The gold market was still underpinned by news earlier in the day that South Korea and Paraguay both significantly added gold to their reserves in July, highlighting strong interest in gold among the official sector.
Spot gold inched down 0.2 percent to $1,760.25 an ounce by 3:06 p.m. EDT (1906 GMT). The metal hit a near-seven month high at $1,787.20 an ounce last week, but has since met technical resistance to break above this year’s high at $1,790.30.
U.S. COMEX gold futures for December delivery settled up $1.80 at $1,766.40 an ounce, with trading volume about 20 percent below its 250-day average, preliminary Reuters data showed.
COMEX futures’ open interest, which measures outstanding long and short contracts, rose to a one-year high of 490,744 lots as of Friday. Open interest in U.S. gold futures has gained more than 25 percent in the past 30 days.
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Data from the International Monetary Fund on Tuesday showed South Korea raised its holdings of gold by nearly 16 tonnes in July. The country has doubled its bullion reserves in just one year after being one of the largest purchasers of gold in 2011.
Paraguay also raised its reserves in July from a few thousand ounces to more than 8 tonnes. So far this year, central banks have added a net 262.1 tonnes to their reserves, compared with 203.4 tonnes in the first eight months of 2011.
Private investors have also added to their holdings of gold through exchange-traded funds backed by physical metal, which now hold a record 74.1 million ounces.
In other precious metals, silver edged down 0.7 percent to $33.71. Platinum gained 0.7 percent to $1,626.25 an ounce, while palladium was down 0.9 percent on the day at $634.97 an ounce.
Platinum group metals rebounded, after palladium’s biggest one-day drop in six months on Monday, as platinum output appeared to return to normal in top producer South Africa. 3:06 PM EDT LAST/ NET PCT LOW HIGH CURRENT
While the Eurozone faces these hurdles, investors are not thwarted, be they government or private sectors. Gold Holds Strong Amidst Developments in Eurozone will cushion the crash when the inevitable comes, as what gold always has done in the past. The question is what will we do when the crash comes? The answer, do not wait until the last minute. Buy gold now.
Go to the Reuters article here.