Cash For Gold
September 13, 2011 by staff
The contract for September delivery lost and 46.50, or 2.5%, to close at 1809.90 and an ounce on the Comex division of the New York Mercantile Exchange, the lowest since ending August 29.
Concerns about the health of the euro area continued to rattle global markets Monday, pushing European and U.S. stocks low. Investors see a credit crunch on the continent, probably in Greece seen as standing on the edge of a compliance and market talk focuses on the possibility that Moody ‘s Investors may lower the credit ratings of some French banks large.
“You have the liquidation of assets out of Europe,” said Frank McGhee, a precious metals trader with Integrated brokerage services in Chicago. Gold is up 27% this year, and operators are likely to take advantage of some of those profits to offset weakness in other assets.
Europe fears spread of the debt-helped push gold to record levels above 1,900 and an ounce last week, but the market lost momentum as stocks rebounded and limited investor demand for a safe place to park in effective. Some investors turn to gold in the belief that it retains its value better than other assets during the economic crisis.
The strength of the U.S. dollar in recent days is also helping keep a lid on gold prices,anlysts at Commerzbank said. Dollar-denominated gold has historically moved inversely to the dollar, as the stronger dollar makes it more expensive for buyers using other currencies.
Market participants expect a volatile session in gold to continue this week as traders look for what may be contentious debate over the use proposed by President Barack Obama and the infrastructure program and traders take positions ahead of the formulation policy of the Federal Reserve committee meeting next week.
In the absence of a clear perspective on these issues and European debt, the path of least resistance for gold is probably lower, MF Globalanlyst Tom Pawlicki said, as the market failure to maintain the upward momentum recently signal loss.
Mr. Pawlicki said he expected gold to retire around 1750 and during the next week, but “a fall can be anything but a fall in a straight line, as volatility is likely to remain.”
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