Gold prices climbed almost 1% on uncertainty over weather Greece would receive bailout funds. The People's Bank of China have pledged to support Europe placing their confidence in the euro. News from Greece continues to drive the financial markets.
February 15, 2012 9:43 AM EST
International Business Times
GOLD PRICE NEWS – The gold price climbed nearly 1% Wednesday to $1,736 per ounce as uncertainty over whether Greece would receive its bailout funds helped drive investors into the yellow metal. Stocks and commodities rose alongside the price of gold, shrugging off Greek worries, after People’s Bank of China Governor Zhou Xiaochuan pledged to support Europe. Zhou stated, “Some people had cast doubt or suspicion over the currency, but for the People’s Bank of China, we have always been confident in the euro and its future.” S&P 500 stock futures climbed 4.70 to 1352.40 and WTI crude oil advanced $1.00 to $101.74 per barrel.
During yesterday’s trading session, the gold price oscillated between gains and losses as a myriad of economic factors pushed and pulled the yellow metal in opposite directions. The price of gold initially rallied toward $1,730 after U.S. retail sales came in below expectations, but later fell to $1,714 amid strength in the U.S. dollar and broad-based financial market weakness. In afternoon trading, however, the gold price climbed back to $1,720 alongside the euro/dollar currency cross and broader markets.
News out of Greece continues to drive financial markets. There have been numerous reports that Greece was moving closer to implementing recently approved austerity measures that would ensure it receives its next round of bailout funds. Specifically, a Greek government source who spoke on condition of anonymity stated that conservative party leader, Antonis Samaras, is expected to deliver a letter of commitment to the nation’s international lenders on Wednesday. However, there was no official comment from Greek officials on the report.
Gold shares pared their losses in concert with the gold price on Tuesday afternoon. The Market Vectors Gold Miners ETF (GDX) fell as much as 2.0% to $53.19, but cut its drop in half to finish lower by 1.0% at $53.77 per share. Among the large-cap gold miners, two of the largest decliners were Eldorado Gold (EGO) and Harmony Gold (HMY). EGO slipped 1.9% to $13.08 per share and HMY retreated 1.7% to $12.58 per share. Gold mining stocks moved higher across the board Wednesday morning on the back of stringer gold prices.
Over the past two weeks the gold price has repeatedly failed to remain above the $1,750 per ounce level. In each instance, the price of gold subsequently turned sharply lower. After rising 11.2% in January, the yellow metal is now nearly unchanged in February.
Commenting on the outlook for the gold price, long-time commodities investor Dennis Gartman offered a cautious stance. “We are concerned about gold’s immediate future in light of the chart of gold in (U.S.) dollar terms,” he wrote in the latest edition of The Gartman Letter. “The trend line that has defined gold’s rise since late December has been broken.”
In contrast to Gartman’s comments, another well-respected investor let his actions rather than his words do the talking on Tuesday. The latest 13-F filing for Soros Fund Management – run by billionaire George Soros – revealed that the firm raised its stake in the SPDR Gold Trust (GLD) during the fourth quarter of 2011. Soros increased its position in the GLD – which as the world’s largest gold ETF serves as a proxy for the gold price – from 48,350 to 85,450 shares, worth approximately $14.3 million.
To see original article CLICK HERE