Saturday 11 June 2011
Posted by
Admin Hijrah Dinar
Gold prices are expected to rise next week as fears of a
ratcheting up in Europe’s sovereign debt crisis will encourage buyers to
return to the metal, participants in the Kitco News Gold Survey said.
In the Kitco News Gold Survey, out of 34 participants, 21 responded this week. Of those 21 participants, 14 see prices up, while three see prices down and four see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical chart analysts.
The worries over the economic health of southern-tier European countries are back to the forefront of news and that is a major reason why many survey participants said they expected higher prices next week.
“Inflation, sovereign debt and economic growth concerns should continue to support gold prices,” said Mark O’Byrne of GoldCore.
The Greek cabinet has agreed to a new round of planned austerity measures, but the Greek opposition party has not and the public continues to protest over the belt-tightening. Further, fresh fears about debt auctions in Spain resurfaced when a story in the Wall Street Journal included more details on why a EUR1 billion covered bond issue backed by Spanish regional debt failed to sell last week. That could put some pressure on the euro currency. Normally a weaker euro would be negative for gold, but many said the safe-haven aspect of gold will dominate over currency considerations.
There are a few participants who cite some reservations for gold’s strength based on technical-chart action. Gold has had difficulty trying to stay above $1,550 an ounce and that could be a sign the market is due for a mild correction or at least sideways trade. Another pointed to the seasonal tendency for gold to put in a lackluster performance during June and July as a reason prices could be sideways to lower.
By Debbie Carlson of Kitco News
Cecylia Tulikowski-Denison and Alexander Létourneau contributed to the survey.
In the Kitco News Gold Survey, out of 34 participants, 21 responded this week. Of those 21 participants, 14 see prices up, while three see prices down and four see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical chart analysts.
The worries over the economic health of southern-tier European countries are back to the forefront of news and that is a major reason why many survey participants said they expected higher prices next week.
“Inflation, sovereign debt and economic growth concerns should continue to support gold prices,” said Mark O’Byrne of GoldCore.
The Greek cabinet has agreed to a new round of planned austerity measures, but the Greek opposition party has not and the public continues to protest over the belt-tightening. Further, fresh fears about debt auctions in Spain resurfaced when a story in the Wall Street Journal included more details on why a EUR1 billion covered bond issue backed by Spanish regional debt failed to sell last week. That could put some pressure on the euro currency. Normally a weaker euro would be negative for gold, but many said the safe-haven aspect of gold will dominate over currency considerations.
There are a few participants who cite some reservations for gold’s strength based on technical-chart action. Gold has had difficulty trying to stay above $1,550 an ounce and that could be a sign the market is due for a mild correction or at least sideways trade. Another pointed to the seasonal tendency for gold to put in a lackluster performance during June and July as a reason prices could be sideways to lower.
By Debbie Carlson of Kitco News
Cecylia Tulikowski-Denison and Alexander Létourneau contributed to the survey.
Category:
Gold Saving / Investment
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