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Gold Prices Fall, Gold Prices Rise..Net Result is a Flat Market
Pinnacle Digest writes: According to Ben Traynor, an associate of Adrian Ash’s at Bullionvault.com, there are several forces pulling gold both up and down at the moment. The net result is that gold prices have been stuck between $1630 and $1675 for one month now.
Why Gold Prices Have Fallen
The US non-farm payrolls showed less demand for jobless benefit claims, which gave strength to the USD and naturally put selling pressure on bullion.
Both Spain and France recorded relatively strong demand for their government bonds. Spain managed to sell 1.6 billion euros worth of bonds but had to pay 1.4 percentage points higher in interest than the last auction.
France was able to sell 5 billion euros worth of government debt despite it appearing that Sarkozy will be ousted by socialist leader Francois Hollande.
An interesting statistic to take note of, and a clear indication risk appetite is minimal, is that trading volume in the overall market is at its lowest level since 2007. This likely has something to do with gold’s lackluster performance of late as well. The precious metal, although considered a safer asset than the USD by our team at Pinnacle, is still deemed high risk by most of the world.
Why Gold Prices Have Risen
Ben Traynor explains that over in India, the world’s number 1 gold consuming nation, gold traders have extended their positions in the futures market. In addition, the Rupee fell further in value on Thursday which further increased the value of gold in India.
Click here to read Ben Traynor’s full article.