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The price of gold has become one of the dominant themes in global markets over the past couple of years as the financial crisis unravelled. The Gold wrap reports on the latest trends in the price of the precious metal as well as factors influencing the demand for the safe haven asset.
Gold prices climb after EU treatyJanuary 31 2012, 4:57pm
Gold prices edged higher today after the EU reached an agreement to tighten fiscal discipline within the union by imposing automatic fines on countries that breach their budget deficit targets.
The EU countries also agreed to set up a €500 billion permanent bailout fund.
The deal was signed by all EU members with the exception of Britain and the Czech Republic.
Europe’s fiscal pact along with upbeat statements from Greek Prime Minister Lucas Papademos, who said “significant progress” has been made in the debt ridden nation’s negotiations with its private bondholders, reduced demand for the safe haven US dollar.
Gold is seen as an alternative investment to the US dollar and tends to move inversely to the greenback.
In addition, oil futures surged today, boosting the yellow metal’s appeal as an inflation hedge.
Demand for oil was driven by reports that German Chancellor Angela Merkel has asked the world’s second largest energy consumer China to reduce its dependence on oil imports from Iran, which is accused of illegally developing a nuclear weapon.
Gold traded at US$1,734/oz this afternoon, up US$4 from Monday’s close. Silver declined 21 cents to US$33.29/oz and platinum dropped US$8 to US$1,601/oz.
Today’s top risers in the sector were:
Shanta Gold (LON:SHG), up 10.5 percent at 28.75 pence at midday
GGG Resources (LON:GGG), up 10 percent at 18.44 pence
Orsu Metals (LON:OSU), up 10 percent at 11 pence
Vatukoula Gold Mines (LON:VGM), up 7.5 percent at 91 pence
Minco (LON:MIO), up 7 percent at 3.35 pence
The top fallers were:
Caledonia Mining (LON:CMCL), down 9 percent at 7.5 pence at midday
Solomon Gold (LON:SOLG), down 6.5 percent at 10.5 pence
Triple Plate Junction (LON:TPJ), down 5.5 percent at 4.34 pence
Greatland Gold (LON:GGP), down 4 percent at 1.25 pence
Kolar Gold (LON:KGLD), down 3.5 percent at 13.27 pence
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