Gold Price Range-Bound after Ireland, ahead of US Holiday

2010-NOV-23

From the GoldMoney News Desk --

The gold price has been relatively stable at around $1,360/oz this week. Gold has been range-bound since Ireland officially asked Europe for help to pay off their overwhelming debts. The IMF, ECB and the European Commission are expected to calculate a total rescue fund of around 90 billion Euros. The cash will come partly from the IMF, and the rest from European countries in the two funds set up after the Greek bail out.

Mathew Turner, an analyst at Mitsubishi spoke to Reuters: '[Gold has] come down a bit on the Irish news, the Euro has come down. It's not really huge moves, it's because traders are uncertain whether the bailout will be a success.'

The Euro fell as investors worried that the debt troubles in Ireland may spread to other European countries. The dollar gained on this news and kept the gold price under pressure. The markets are still very cautious as they wait to measure the real impact of the Fed's quantitative easing in the US, and debt loans in Europe. While in the long-term most analysts still expect the gold price to gain against the major currencies, in the short term we could see a small pull back. This week sees the Thanksgiving holiday in America, which usually means reduced liquidity. This coupled with nervous markets can mean that price movements could be exaggerated.

Silver held last week's gains and was up at around $27.60/oz on Tuesday. The gold to silver ratio fell under 50 for the first time since early 2008 on Friday as the silver price continues to chase gold.

Platinum and palladium were both down this week, to $1,641/oz and $675/oz respectively. Platinum has fallen over $160 or around 9% from its high of $1,803 reached on the 9th of this month.

All data and quotes sourced from Reuters.