Gold Prices Dip As Eurozone Toils In Uncertainty

Gold Prices Dip As Eurozone Toils In Uncertainty
News
Like Us On Facebook
Like Us On Facebook

Gold prices were dipping slightly Tuesday as investors sat on the sidelines waiting to see if the eurozone could avoid growing doubts about bailout agreements.

Gold for December delivery was falling $4.50 to $1,766.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,767.90 and as low as $1,753.20 an ounce, while the spot price was gaining $8.30, according to Kitco’s gold index.

“It’s just seesawing back and forth based on the last headline,” said George Gero, precious metals strategist at RBC Wealth Management.

“Everybody’s waiting to see, because there was some chatter about Spain and whether the eurozone ministers are getting their act together or not.”

Silver prices for December delivery were rising 30 cents to $34.67 an ounce, while the U.S. dollar index was up 0.25% to $79.15.

The yellow metal looked to reports of mounting worries that European leaders would not be able to reach an agreement on a banking union, and that if they settled a resolution, it would take years to implement.

Further evidence that gold traders weren’t committed to a move in either direction was that the precious metal had not sold off more after crude sharply fell almost $5 a barrel Monday afternoon.

Typically hedge funds and managed-futures funds are either long or short both crude and gold, said Gero. The question is whether these funds, in the event of a crude selloff, should also sell gold because they need the buying power. So, if the euro currency trades down, and crude sells off, then there is a gold dip. In Monday’s case, the yellow metal didn’t appear to follow the sharp drop of crude.

Traders could be locked into a slow grind for gold in the near-term, but long-term fundamentals may look more optimistic.

“It might be kind of boring here for a little while [as gold] just kind of slow grinds it’s way higher,” said David Banister, chief investment strategist at TheMarketTrendForecast.com. “I think that most people would probably agree that the fundamentals are very good for [precious metals], from the perspective of negative real interest rates … and increasing inflationary pressure in 2013.”

The Federal Reserve’s implementation of a new bond-buying program, dubbed QE3, has heightened discussions of inflation in the United States as the central bank has left its easing program open-ended.

Bond investors on Monday bumped a key measure of inflation expectations to its highest level since 2006, according to The Financial Times, as the “break-even rate” jumped as high as 2.73%, based on the difference between nominal and inflation-protected Treasury debt.

Though soaring inflation is still a speculative call, this indicator could be a main driver in the gold price during the long-term.

Gold mining stocks were mixed Tuesday. Shares ofRandgold Resources (GOLD) were shedding 1.3%, while NovaGold Resources was posting gains of 1.1%.

Among other mining stocks, Kinross Gold (KGC) was up 0.39%, as Barrick Gold (ABX) pulled back 0.52%.

Gold ETFs were rising Tuesday as SPDR Gold Trust(GLD) increased 0.65% and iShares Gold Trust (IAU)rose 0.64%.

Elite.

Share Tweet
React
Like Us On Facebook
Like Us On Facebook

Julian Sonny

From the sandy beaches of Hawaii, to the streets of New York: Julian has seen it all. His lifetime of travels has given him a broad scope of knowledge and an eclectic taste unlike any other in the tri-state area. Julian has often been compared to cultural icon, The Rock, because of his unequivocal work ethic and warrior-like stature.

More In News

World Laura Argintar

Iconic Fashion Designer Oscar De La Renta Dies At Age 82

It is a tragic day in fashion history, as beloved fashion designer, Oscar de la Renta has died at age 82. De la Renta, who most recently designed Amal Clooney’s iconic wedding dress, was diagnosed with cancer in 2006, according to ABC News. He leaves behind a regal fashion legacy that has graced numerous red […]

Also On Elite

World

You’ve Never Seen A Graveyard As Cool As These Hanging Coffins (Photos)

The Igorot tribe of the Philippines has been laying loved ones to rest on the walls of cliffs or the inside of caves for 2,000 years. According to Australia’s news.com, the people are often forced to break the bones of the dead to fit them into the small, wooden coffins, which are made of logs. […]

Music

Woman Can Amazingly Sing All The Notes Of A Full Chorus At The Same Time

Now, this is impressive. Here’s a video of a polyphonic overtone singer named Anne-Maria Hefele. For those of you unfamiliar with that term, it means she is capable of singing more than one note at once. It’s really incredible and took her 10 years to master the skill. The sound produced is somewhat hypnotic, and […]