GOLD,SILVER & PRECIOUS MARKET WRAP

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.

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Wednesday, February 08, 2012

Gold pulls back on profit taking

Gold pulls back on profit taking

Gold fell on profit taking this afternoon following an early rally which came amid signs that Greece was inching closer to agreeing on further spending cuts and securing more financial aid from the EU and the IMF.

A report in the Wall Street Journal said the European Central Bank (ECB) was ready to make concession and exchange its Greek bonds at below face value if a debt restructuring deal was reached.

The move by ECB would reduce the struggling country’s debt burden by as much as €11 billion.

Greek policymakers are currently in talks over an agreement to impose further austerity measures, which are a condition of the next bailout package from the EU and the IMF.

The reports propped up equities on both sides of the Atlantic and the euro, while reducing demand for the US dollar, an alternative investment to gold.

Gold retreated later in the session as investors took profits after the yellow metal reached US$1,750 per ounce.

A study by Credit Suisse and London Business School found that gold is not a reliable hedge against growth in consumer prices. The report said gold provides no income flow and has generated low long term returns and can “fail to provide a positive real return over extended periods”.

Gold traded at US$1,737/oz, down US$7 from Tuesday’s close. Silver was headed in the same direction as gold, rallying 20 cents to US$33.95/oz, while platinum bucked the trend, falling US$5 to US$1,652/oz.

Orsu Metals (LON:OSU), up 9.5 percent at 12.75 pence at midday

Stratex International (LON:STI), up 9.5 percent at 8.35 pence

Central Rand Gold (LON:CRND), up 6.5 percent at 1.19 pence

Chaarat Gold Holdings (LON:CHAR), up 4 percent at 28.56 pence

Patagonia Gold (LON:PGD), up 3.5 percent at 42 pence

The top fallers were:

Oxus Gold (LON:OXS), down 10 percent at 1.28 pence

Greatland Gold (LON:GGP), down 9.5 percent at 1.11 pence

Peninsular Gold (LON:PGL), down 9 percent at 26.75 pence

GMA Resources (LON:GMA), down 8 percent at 0.23 pence

Caledonia Mining (LON:CMCL), down 6 percent at 7.63 pence at midday


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