Renewed Contagion Concern After Italian Election - Stocks Fall, FX Volatility And Gold Rises
By Mark O`Byrne | February 27, 2013 12:33 AM EST
Today’s AM fix was USD 1,597.25, EUR 1,219.65 and GBP 1,052.07 per ounce.
Yesterday’s AM fix was USD 1,592.50, EUR 1,201.89 and GBP 1,051.85 per ounce.
Silver is trading at $28.79/oz, €22.11/oz and £19.09/oz. Platinum is trading at $1,600.50/oz, palladium at $729.00/oz and rhodium at $1,200/oz.
Gold climbed $14.10 or 0.89% yesterday in New York and closed at $1,594.60/oz. Silver rose to $29.24 in London before it fell back to $28.90, but it still finished with a gain of 0.94%.
Gold inched above $1,600/oz today, extending gains from the previous session and into the fourth straight session as uncertainty over Italy's election results stoked renewed fears that the euro zone debt crisis is set to return, and increased demand for the yellow metal.
Italy’s politics were turned upside down yesterday after the election resulted in the dissident, 5-Star Movement of comic Beppe Grillo creating the strongest party in the country, but left no group with a clear majority in parliament. This political uncertainty weighed on the euro as Italy is the Eurozone’s 3rd largest economy.
Bullion’s gains were limited as investors await the Federal Reserve chief Ben Bernanke’s semi-annual testimony to U.S. Congress before the Senate Banking Committee today, and tomorrow he visits the U.S. Housing Financial Services Committee. A dovish statement from Bernanke will support gold.
European stocks declined as Italy’s inconclusive parliamentary election renewed concern that the region’s sovereign-debt crisis will deepen. This follows falls on Wall Street yesterday and Asian falling overnight.
Huge complacency and even denial about the debt crisis and suggestions that it had been resolved have contributed to investors selling physical gold in recent days.
The Financial Times Alice Ross reported that the "heavy moves last night in currencies were among the worst since the financial crisis."
Gene Arensberg of the Got Gold Report warned of the market equivalent of seismic tremors and market reversals, including reversals in the monetary metals (see commentary).
Major powers will offer Iran some sanctions relief this week if Tehran agrees to curb its nuclear program, according to a U.S. official said on Monday.
Western diplomats have told Reuters the six countries will offer to ease sanctions on trade in gold and precious metals if Iran closes its underground uranium enrichment plant.
Iran has indicated, however, that this will not be enough according to Reuters.
Click here in order to read GoldCore Insight - Currency Wars: Bye Bye Petrodollar – Buy, Buy Gold
Gold futures score biggest gain of the month – Market Watch
Gold’s death cross is no reason to feel grim – Market Watch
What Britain’s downgrade means for your money – Money Week
What's Happening to the Gold Market? – Casey Research
Correcting Antal Fekete’s Historical Silver Errors – Silver-Investor
For breaking news and commentary on financial markets and gold, follow us on Twitter.