, IncGold prices stable, fly high
June 7, 2010 - Gold prices have bounced right back from the recent “low,” thanks to the euro’s sliding value.
For the first time in four years, the euro reached a record low of $1.20, founded on the possibility that the sovereign debt crisis in Europe might extend to markets worldwide. While U.S. and European equities also dropped, the week ended with a loss in the commodities market. According to Frank McGhee, head dealer at Integrated Brokerage Services LLC, Chicago, when currencies drop in value, gold prices save the day. He says, “There is still a flight-to-quality demand.” In his opinion, gold is more likely to be stable compared to other assets.
Gold prices saw an increase of 0.2 percent this week after last week’s slump. Because of the euro’s devaluation, gold prices in euros saw an all-time record. Gold futures in New York saw a record high of $1249.70 on May 14, 2010, staying right ahead of equities, bonds and other commodities.
Michael Lewis, head of commodities research at Deutsche Bank AG is confident that gold prices will touch $1,700 next year as a result of the demand from Asian central banks. He also referred to the rapidly increasing investment in funds traded via the exchange. According to data from Bloomberg, the global holdings of gold ETFs amounted to 2008.1 metric tonnes, a whopping 78 per cent of last year’s global production.
In the meantime, precious metals that are not doing well this week are palladium, with prices down seven percent this week. Platinum futures dropped 1.6 percent while silver prices saw a drop of 6.1 percent.
Stewart Lawson
Senior Staff Writer - GoldPrice.net
