Gold tracks back to $1600 level overnight, recovers somewhat in early NY trading
Gold tracks back to $1600 level overnight, recovers somewhat in early NY trading by Michael J Kosares for USA Gold
Gold tracked back to the $1600 level in overnight trading then recovered somewhat at the New York open as markets generally took a breather from the chaotic trading of the last several days. It is now priced at $1608 – down $8 on the day. Silver is up 4¢ on the day at $14.06. Russia announced it would curtail purchases of gold from domestic producers – a move that, in turn, would allow production to be released in the international market. Russia is the third-largest gold producer globally mining about 300 tonnes per year – about 10% of the global total. Though Russia’s release of the metal will be welcome in this bullion-starved environment, the price effect is likely to be minimal. According to the London Bullion Market Association, gold market turnover is roughly $37 billion, or over 900 tonnes, per day.
“The gold market may take a short break and consolidate in the near term,” says HSBC gold market analysts in a report relayed by FXStreet, “with the US fiscal package finally passed, and no fresh stimulus imminent from the EU. We think any sense that the US economy could be hit more than other countries could undermine the USD ‘safe-haven’ status. This would likely benefit gold as ‘safe-haven’ demand may be channeled into bullion instead of the USD. Massive fiscal spending on a global level, combined with monetary accommodation and near-zero interest rates in many countries, all contribute to a bullish outlook for gold. These factors will likely support gold longer-term.”