Gold Price Rises For Fifth Day – 2 and Half Week High

By: GoldCore

Today’s AM fix was USD 1,192.55, EUR 1,088.89  and GBP 801.18 per ounce.

Yesterday’s AM fix was USD 1,193.25, EUR 1,085.56  and GBP 798.96 per ounce.

Gold rose  0.26 percent or $3.10 and closed at $1,193.70 an ounce yesterday, while silver slipped 0.35 percent or $0.06 at $17.00 an ounce.

Gold inched downward after its five day rally, but hovered near its two and a half week high.

In Singapore gold for immediate delivery pulled back 0.2 percent to $1,190.90 an ounce near the end of trading but was not far from a high of $1,195.30 hit in the prior session.

Yesterday, Fed policymaker James Bullard said that a first rate hike “sometime in the summer” would still leave monetary policy extremely accommodative, and that market expectations should be better aligned with those of the Fed considering the current “boom time” for the U.S. economy.

Positive economic data from the Eurozone strengthened the euro versus the dollar, and expectations for a U.S. interest rate rise is focused on later in the year. As ever, watch what the Fed’s actions rather than their daily ‘jawboning.’

Gold is at $1,192.58 per ounce or up 0.08 percent. Silver is $16.96 per ounce or plus 0.25 percent and platinum is at $1,143.25 per ounce or up 0.37 percent.

Spot gold at $1,200 per ounce remains a key psychological level for gold and a close above this level should see gold eke out further gains.

The European Central Bank banned Greek banks from increasing holdings of short-term government debt, as concerns grow that  they are nearly out of cash. Eurozone finance ministers will hold a call on Wednesday to discuss progress on Greece, amid concerns that the country will run out of money by early April.

A clash in the Ukraine amongst politicians was seen as Ukrainian President Petro Poroshenko accepted the resignation of Igor Kolomoisky, the billionaire governor of the strategic Dnipropetrovsk region who has clashed with authorities over the control of energy companies.

Yesterday, in a vote that largely slid under the radar, the U.S. House of Representatives passed a resolution urging Obama to send lethal aid to Ukraine, providing offensive, not just “defensive” weapons to the Ukraine army – the same insolvent, hyperinflating Ukraine which, with a Caa3/CC credit rating, last week started preparations to issue sovereign debt with a U.S. guarantee.

The resolution passed with broad bipartisan support by a count of 348 to 48. The measure urges Obama to provide Ukraine with “lethal defensive weapon systems” that would better enable Ukraine to defend its territory from “the unprovoked and continuing aggression of the Russian Federation.”

Geopolitical risk remains very high and is not priced into “irrationally exuberant” markets.

This update can be found on the GoldCore blog here.

Mark O'Byrne

Director

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

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