If you’re looking for an apartment, now is the timeOctober 6, 2015 6:07
MOUNTING: Gold Rises On Deepening Euro Zone Crisis
"There is more of a risk aversion type dynamic developing because of all the complications around Europe and with the Greek referendum on the cards,"Standard Chartered head of metals research Dan Smith said.
November 3, 2011 4:01 by Reuters
Gold firmed on Wednesday, helped by safe-haven demand as the euro zone troubles deepened and business surveys showed the severe impact the crisis had on manufacturing in the region.
A recovering euro, which rebounded from a three-week low against the dollar, also helped underpin the precious metal. The dollar briefly extended losses against that euro after data showed the U.S. private sector created more jobs than expected in October.
Greece’s Prime Minister George Papandreou shocked markets on Tuesday with a call for a referendum on a European Union 130 billion euro bailout package. He faces a grilling on Wednesday from the leaders of Germany and France.
Adding to the gloom, business surveys showed the downturn in euro zone manufacturing in October was even deeper than previously reported.
“There is more of a risk aversion type dynamic developing because of all the complications around Europe and with the Greek referendum on the cards,”Standard Chartered head of metals research Dan Smith said.
“All these things will bring some doubts about the political and macro outlook.”
But in positive news, U.S. private employers added more jobs than expected in October, and more were added in September than originally reported, while a separate report showed planned layoffs dropped sharply last month.
U.S. gold rose to an intraday high of $1,738.30 an ounce, and was $1,728.5 at 1321 GMT.
Spot gold rose around 1 percent to an intra-day high of $1,736.40, before trimming gains to $1,726.30 from $1,718.95 late in New York on Tuesday.
The euro edged up, rebounding from a three-week low against the dollar as investors took a breather from a deep sell-off, although it was vulnerable to the downside on worries over Greece’s referendum and the weak data.
“Over the next few days, we think gold prices are likely to remain more resilient as the market should benefit from safe haven demand and its reasonable evaluation,”Barclays Capital said in a note.
EYES ON BERNANKE
Eyes were on a news conference by the U.S. Federal Reserve chief Ben Bernankelater in the day after a two-day policy meeting.
The Fed looked set to take a breather from monetary stimulus measures, even if financial market turbulence heightens the chances of action later.
Investors will also closely watch the rate decision by the European Central Bankdue on Thursday, just as a Group of 20 summit is to take place and likely to pressure Europe on the debt crisis solution.
Investor interest in gold continued to pick up this week, reflected in inflows of metal into exchange-traded funds.
Holdings of gold in the major exchange-traded funds (ETF) tracked by Reuters have risen by
over 800,000 ounces this month, marking their first monthly increase since July.
In ETF flows on Wednesday, gold holdings were up by just over 11,000 ounces after an inflow into the COMEX Gold Trust.
Last month, global holdings of gold in ETFs rose by 852,000 ounces to 67.907 million ounces, more than offsetting the 444,000 ounces outflow in September and the 297,000 ounces outflow in August.
“They have been trending up for the last week or so. Investors are coming back in to those two (gold and silver) because of the weaker macro environment,” Smith said.
“It’s also a good time of the year for physical demand for gold as well as we head into the end of the year because of the Indian wedding season.”
The bulk of the inflows were into European-based funds, rather than their larger U.S. counterparts, which analysts have said is reflective of the anxiety among investors in the region over the impact of the euro zone debt crisis on monetary policy, inflation and growth.
Silver was up 1.5 percent at $33.76 an ounce from $33.27 previously. Platinum rose 0.9 percent to $1,598.99 an ounce from $1,582.65, and palladium was $641.22 from $631.50.
(Additional reporting by Amanda Cooper)