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Gold value drops
This European debt crisis helped the dollar achieve a higher price which determined a damping demand for raw materials evaluated in the US currency. As a result, the price per bullion recorded a down fall of 0.5% which means $1,545.55 an ounce. Yesterday, the gold recorded the highest price since June 22 managing to achieve $1,557.05. This was possible because of the debt crisis in Europe which started in Greece and seems to have spread to other countries from the euro-zone as well. Therefore, the metal touched higher prices in euro and pounds.
Zhao Jingjing, analyst at Essence Future Co, said that investors are “in risk-aversion mode” because the European debt crisis is once again in the spotlight and gold is “benefiting from this”. He also said that if a “stronger dollar may limit gold’s gain”, it’s unlikely to see both increasing in the same time as “investors seek a safe haven”.
Comex in New York set the price of gold at $1,548.10 an ounce while in Europe the trade price of the metal was of $1,117.554 euros and 980.05 pounds. Another interesting phenomenon was the fact that the dollar managed to achieve the highest level in the last three months against the six-currency basket including the Euro.
In December the price of gold on the Shanghai Futures Exchange was of 322.07 yuan per gram ($1,547.43 per ounce) while the June price per bullion recorded a down fall of 0.8% meaning 3,990 yen per gram ($1,554.83 per ounce) on the Tokyo Commodity Exchange.
The European finance ministers announced the possibility of “bond buybacks” to help Greece pay its financial debt, but they can’t assure the world that a temporary default won’t be needed as they keep fighting to keep under control an economic crisis that has now affected Italy. Italy is the third largest economy in the region and with the second debt as value after Greece. Italy has a deficit of 1.6 trillion euros in bonds and 175 billion euros in debt maturities.
Because of this situation is possible that the price of gold will exceed $1,600. Cameron Alexander, senior analyst at GFMS Ltd, said that prices “could retrace from current levels”. It’s possible that in three months the price of gold will be $1,450 if the prices in this region will be “well supported by bargain hunting and stock replenishment”.
The trade of other metals also recorded a down fall: silver dropped by 1.8% (the price was set at %35.1588 an ounce) and platinum by 0.6 %. Palladium also recorded a down fall of 2% and achieved a price of $754.25 an ounce.
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