Gold Rises as Markets Stabilize but Focus on Japan
Reuters
Amanda Cooper and Jan Harvey
Gold rose on Wednesday as investors took advantage of the previous day's 2 percent price drop to buy the metal and as the extreme risk aversion that prompted a flight to liquidity on Tuesday eased.
Spot gold was last up 0.7 percent at $1,403.85 an ounce at 1435 GMT, while U.S. gold futures for April delivery rose 0.8 percent to $1,403.80.
Prices fell 2.3 percent on Tuesday in their biggest one-day drop since January. They have since steadied as markets await news from Japan, where experts are working to avert a meltdown at a nuclear power plant.
"Now that the dust has settled a little bit and that we've had particularly a recovery in energy and other commodities, that's given a tailwind to gold," said HSBC analyst James Steel.
"If the focus ceases to be entirely on Japan, and the Middle East again gets some headlines, then the geopolitical risk levels will come back in and support gold," he said.
Other traditional safe-haven assets also rallied, with the Swiss franc hitting a record high against the dollar and benchmark U.S. Treasury yields touching their lowest in three months after housing data highlighted the fragility of the U.S. economic recovery.
Unrest that swept the Middle East and North Africa earlier this year, a key factor pushing gold to a record $1,444.40 an ounce last week, continues to simmer.
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Gold Bullion Bouyed by Broad Risk Aversion
FX Street
Gold bullion extended Friday´s late recovery in overnight trading, climbing to a daily high in $1433.50/ounce before easing in the wake of the BoJ´s liquidity injection which helped to calm market jitters. However, the most active contract for April delivery has remained in range to those highs ever since, lingering around $1425.00/ounce in early trading over North America.
The disaster in Japan has added another layer of uncertainty to an already fragile market sentiment, in light of tensions in the Middle East and North Africa as well as re-emerging euro-zone debt concerns. Investors are now pulling back from risky positions and taking refuge in safe-havens like the yellow metal, nervous that recent events could stall the recovery in Japan and more broadly across the globe.
In Europe, EU officials made what is seen as partial progress in regards to strengthening a rescue package for indebted nations in the periphery, however doubts still remain ahead of a more crucial meeting in 2-weeks time. In particular, ministers agreed to increase lending capacity to a full 500 billion euro, yet poignantly rejected proposals to purchase bonds on secondary markets directly from investors.
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Gold Edges Up on Safe-Haven Bidding
MarketWatch
Claudia Assis
Gold futures settled modestly up on Monday, buoyed by fresh doubts about the global recovery in light of destruction in Japan and ongoing concerns about euro-zone sovereign debt and unrest in the Middle East and North Africa.
Gold for April delivery /quotes/comstock/21e!f:gc\j11 (GCJ11 1,425, +3.10, +0.22%) added $3.10, or 0.2%, to settle at $1,424.90 an ounce on the Comex division of the New York Mercantile Exchange.
“The bottom line is, people look at gold as money” anytime unrest or natural disasters hit, said Michael K. Smith, president of T & K Futures and Options Inc. in Florida.
Given the European sovereign debt crisis, geopolitical instability in oil producing nations, and continuing concerns about the global economy, Japan’s quake “could not have come at a worse time both for the indebted Japanese economy and the global economy,” added analysts at GoldCore in a note to clients Monday.
The Japanese started their search-and-rescue operations over the weekend only to find out there was nothing much left to rescue after Friday’s quake.
Fears that the nuclear reactors, damaged by the quake, are at risk of a meltdown added to the country’s woes. Read about Japanese shares.
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Gold Up as Japan’s Nuclear Crisis Fuels Risk Aversion
Reuters
Frank Tang and Jan Harvey
Gold prices rose on Monday, as a nuclear crisis in Japan and heightened political unrest across the Arab world triggered safe-haven buying.
Platinum group metals fell more than 1 percent as demand
expectations took a hit after Japan's devastating earthquake and tsunami, which forced plant closures and production outages in the country's powerful auto industry.
"Gold in the interim remains well bid due to all the uncertainty in the world, led by Japan's possible nuclear meltdown. The Middle East crisis still looms though it is no longer the lead story on the headlines," said Miguel Perez-Santalla, vice president of Heraeus Precious Metals Management.
Gold benefited from heightened uncertainty as Japan scrambled to avert a meltdown at a stricken nuclear plant on Monday after a hydrogen explosion at one reactor and exposure of fuel rods at another.
Political tensions flared across Middle East in North Africa after Saudi Arabia sent troops into Bahrain on Monday to help put down weeks of protests by the Shi'ite Muslim majority, and as fighting intensified between Muammar Gaddafi and Libyan rebels. Growing unrest was also reported in Yemen.
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