, IncMay 31, 2010 - Gold prices continued an upward trend on Monday, hovering above $1216 in the afternoon after closing the week before at $1215. In all, gold prices have risen about 3% in May, though they are finishing the month about $33 (2.64%) off the record high of $1248.95 reached earlier in the month.
Weekly Market Views, a newsletter published by the Dubai Gold and Commodities Exchange and authored by the CPM Group, expects gold prices to fluctuate between $1230 and $1180 this week, “although there still is potential for gold to head toward $1250.” They attribute last week´s gains to the contract roll in the New York market, and note that slightly quelled fears over the euro-zone sovereign debt crisis “could allow for prices to ease a bit this week.” But they add that more financial market instability as well as geopolitical tensions “could push prices sharply higher.”
It was, however, precisely the latest bad news from the euro-zone crisis that spurred the rise in gold prices at the end of last week. Fitch´s deduction of Spain´s credit rating from AAA to AA+ on Friday sent investors scurrying for gold. As Precious Metals Weekly (a Heraeus Trading newsletter) notes, after a recent fall-off in gold prices, “problems of the Spanish banking sector pulled it back up to $1,250 an ounce (it was suddenly back being a crisis-metal).”
The same Heraeus newsletter reports that generally high gold prices have attracted new mining industry investments, and that a recent gathering of mining industry representatives in Lima, Perú, ended in a statement of intent by several major companies to invest in new mines and increase overall production.
Stewart Lawson
Senior Staff Writer - GoldPrice.net
