Gold prices continue to hold above $1280 support level ahead of FOMC. Gold broke above briefly last week but was unable to hold the price above $1300. Gold, for example, has seen its value in euros rise sharply as the shared currency plunges. The dollar’s gains come in large part at the expense of the euro, which has tumbled sharply after the European Central Bank’s full-fledged quantitative easing program aimed at staving off a deflationary spiral in the Eurozone.
Late Friday a note from Commerzbank indicated that “Gold should remain in demand ahead of the Greek elections on Sunday, though afterwards a correction is conceivable following the sharp rise in recent days,”
Silver is in the green at 18.04 holding in the middle of its two week trading range, while platinum is at 1265.40 as the gold/platinum ratio continues to widen. Speculators’ demand for precious metals is deepening after the European Central Bank’s $1.3-trillion stimulus drove gold to a five-month high and silver to the brink of a bull market.
Safe haven buying helped boost the value of exchange-traded products backed by gold and silver by $8.94-billion this month, the most since September, 2012, data compiled by Bloomberg show. Hedge funds and other speculators in futures are the most bullish on gold in two years and have bet more on silver in all but two weeks since the start of November.
Gold climbed 1.2 per cent to 1,292.60 an ounce on the Comex in New York last week, after touching the highest since August. Silver jumped 3.1 per cent. Silver’s 17-per-cent advance this year in futures is almost twice the gain in gold. Even so, gold is still trading at 71 times the price of silver, compared with an average of 58 in the past decade.
January 11, 2016