Gold prices advanced today, driven by a surge in the euro against the US dollar, which is seen as an alternative investment to the yellow metal.
Demand for Europe’s single currency was high ahead of the results of the European Central Bank’s (ECB) second longer term refinancing operation, which will take place tomorrow.
It is currently expected that banks will request around €500 billion in three year loans from the ECB after borrowing €489 billion in the first LTRO in November.
Optimism ahead of the cash injection into the banking sector by the ECB helped the markets shrug off yesterday’s downgrade of Greece to selective default by Standard & Poor’s, which followed the debt-ridden country’s decision to amend its debt documents.
“The effect of a CAC is to bind all bondholders of a particular series to amended bond payment terms in the event that a predefined quorum of creditors has agreed to do so,” S&P said in a note yesterday.
This, said the agency, materially changed the terms of the affected debt and constituted the launch of a distressed debt restructuring.
Gold traded at US$1,784/oz in early afternoon, up US$16 from Monday’s close. Silver rose 98 cents to US$36.44/oz and platinum tacked on US$17 to reach US$1,721/oz.
Today’s top risers in the sector were:
Arian Silver (LON:AGQ), up 8 percent at 30.08 pence at midday
Ariana Resources (LON:AAU), up 5 percent at 4.34 pence
Greatland Gold (LON:GGP), up 4.5 percent at 1.2 pence
GGG Resources (LON:GGG), up 4 percent at 14.93 pence
Mariana Resources (LON:MARL), up 3 percent at 10.43 pence
The top fallers were:
Alecto Minerals (LON:ALO), down 6 percent at 2 pence at midday
Chaarat Gold Holdings (LON:CGH), down 5.5 percent at 30.1 pence
Stratex International (LON:STI), down 4.5 percent at 9.89 pence
GMA Resources (LON:GMA), down 4.5 percent at 0.21 pence
Orosur Mining (LON:OMI), down 4.5 percent at 52 pence