Gold mostly Forex driven
The 5 – month uptrend line held firm last week to push gold higher on the week following a decline in the week prior.
Gold actually looked set to post another declining week until late Friday when the general risk adverse sentiment helped push gold higher. Earlier in the week, focus was on Greece and the eurozone as the Greek Prime Minister decided to form a new government and a vote of confidence in his austerity drive. However, protests sprung up in abundance and the expected flight to safe – haven failed to materialise. The renewed tensions over the Greek sovereign debt helped stoke a soaring US dollar which in turn helped put a damper on the flight to safety in gold, as the cost of gold crept higher for foreign investors.
However, gold valued in Euros rose close to record highs on Thursday, hitting around E1885 ahead of the New York open. “The yellow metal [is] mostly forex – driven for the moment,” said Swiss refinery group MKS, “trading with substantial volatility.” Still, in dollar terms, gold remained range – bound for the rest of the week until late Friday when the IMF warned of greater downside risks to the global economy in its latest quarterly update of the World Economic Outlook.
Gold was pushed higher when the greenback weakened on this news and also on hopes for a new Greek aid package following the Merkel and Sarkozy meeting.
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