Gold is lower in Asian and early European trading on low volume as the dollar has risen and renewed risk appetite has resulted in tentative gains in equity markets. Gold's marginally higher weekly close last week was positive from a technical point of view and could lead to follow through this week as momentum following traders and funds "make the trend their friend."
Gold is currently trading at $1,207/oz and in euro, GBP, CHF and JPY terms, at €960/oz, £804/oz, CHF 1,284/oz., JPY 106,825/oz., respectively.
Silver's price action was even more positive and silver rose 1.5% last week (see below) while gold and silver mining shares surged in value. Much of the speculative froth that had entered the market has been eliminated with speculative longs rushing for the exit in the recent selloff. There has also been significant short covering by the commercials, which might indicate that higher prices are expected after this correction.
Gold in USD—60 Days (60 Minutes)
The market awaits inflation data this week (in eurozone states, the UK, U.S. and China), which will indicate whether the extremely lose fiscal and monetary policies of recent months (and indeed years) are leading to inflation pressures. UK inflation figures will be closely studied tomorrow after worries from Bank of England rate-setter Andrew Sentance about prices rising despite the economic slack created by the recession. The very poor trade and current account deficit figures may lead to the sterling coming under pressure in the coming months.
Markets Await Inflation Figures
Source: GoldSeek, GoldCore (7/12/10)
"Market awaits UK, U.S., China and eurozone states inflation data."