Certified Gold Moves Higher On Euro, China News
Posted by Adam King on February 26, 2010
February 26, 2010 – Certified gold continued yesterday’s recovery, starting the day slowing and gaining momentum based on a stronger euro and unsubstantiated news about China purchasing the remaining IMF gold. Prices accelerated during morning trading, climbing $9.30 to $1,116.90 per ounce at 11:00 AM EST today.
With concern growing over potentially negative US economic data, the euro climbed to 1.3642; conversely, the US Dollar Index tumbled to 80.40, down 0.344 during the morning trading. "Gold has moved higher but only what you’d expect with movements in euro-dollar." said David Barclay, commodity strategist at Standard Chartered in Hong Kong.
While the news proved to be unreliable, many see the claim of China’s impending purchase of the remaining International Monetary Fund gold as being a significant driver of today’s gold prices. Reported by Moscow-based website Rough & Polished, the story has since been discredited for lack of official sources, but the impact may be real. Barclay notes, "You can see the impact when India bought, prices went on to rally substantially after that. China has added sensitivity over the fact that its got such large dollar holdings."
For investors in certified gold, the news of the euro and China’s potential purchase are still favorable. "The euro has rebounded a bit, so that could be the reason why gold is up now. But even if price goes up (at $1,100 per ounce), it’s still not out of the range yet (at $1,130 per ounce)," said one dealer. Investors should consider continued increases in holdings in order to profit from any potential rally.
Stewart Lawson
Senior Staff Writer – Certified Gold Exchange
Categories:
US Gold Market
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