Gold Pops on Laundry List of Bad News
Source: The Street, Alix Steel (7/11/11)
"Gold prices continued their 4% gain as a rush to safety hit markets."
Gold prices were extending last week's gains as investors fled into the safe haven assets after a spate of weak global economic news.
Gold for August delivery was adding $12.60 to $1,554.20 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,557.60 and as low as $1,542.30 while the spot gold price was up $5.70, according to Kitco's gold index.
Silver prices were falling $0.08 to $36.45 an ounce as global industrial demand worries dragged on the metal. The U.S. dollar index was adding 1.15% at $76.05 and the euro was tanking 2% against the dollar.
Gold prices were continuing their 4% gain from last week as a rush to safety hit markets. The lackluster jobs number in the U.S. on Friday, Greek debt issues with speculation growing that Greece might be allowed to default on some of its bonds, Italian banks getting slammed on Italy's own debt problems and the hotly anticipated meeting at the White House Sunday between Democratic and Republican leaders yielding no results on the debt ceiling are all adding up to make gold and silver a safe place to put cash.
"I think this is going to last for a while," says Imaru Casanova, equity research analyst at MLV & Co. This rally is "not ending anytime soon. . .I think there is more room for gold than silver." Casanova sees gold above $1,600 in 2011, which will help silver, but the $50 still seems lofty.
Casanova thinks that gold stocks represent the real buying opportunity. "[Equities are cheap but] sometimes get caught in the overall equity selloff. You have to cover losses from other markets and you will see these stocks caught in that."