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Mei 24, 2011

I heart you: emas is a must (1370) … 240511

Filed under: EMAS or GOLD...ce'ileh... — bumi2009fans @ 3:43 pm

Gold hits two-week high on euro debt worries

By Silvia Antonioli
LONDON | Tue May 24, 2011 10:53am EDT
(Reuters) – Gold rose to its highest in nearly three weeks on Tuesday as concerns about a spreading EU debt crisis fueled safe haven buying, while a softer dollar provided support.

Spot gold hit $1,527.45 a troy ounce, its highest since May 4. It was bid at $1,526.50 an ounce at 1408 GMT from $1,516.05 late in New York on Monday.

Portugal and Ireland would be at risk of multi-notch credit downgrades, pushing their ratings into junk territory in the event of a default by Greece, Moody’s EMEA chief credit officer told Reuters.

“There is so much uncertainty that the downside risk for gold is low in the short term,” said VTB Capital analyst Andrey Kryuchenkov.

“People are still frightened about Portugal and about a possible restructuring of the Greek debt so safe haven flows will continue,” he said.

But in the long term there may be headwinds for the precious metal such as a possible decision of the U.S. Federal Reserve to increase interest rates, Kryuchenkov said.

Low interest rates help gold which competes with yield-bearing assets for investors’ cash.

“We expect gold prices to continue to climb in 2011 as the resumption of quantitative easing should keep U.S. real interest rates low,” Goldman Sachs said in a note.

“However … we expect U.S. real interest rates to begin to rise into 2012, likely causing gold prices to peak in 2012.”

A lower U.S. currency, which makes commodities priced in dollars cheaper for holders of other currencies, was also supporting gold.

Gold prices in British pounds hit a record high of at 944.18 pounds an ounce. Gold denominated in euros hit a record high of 1,081.76 euros.

“We like (gold in euros) right now, considering the breadth and depth of risk-sapping variables that currently prevail,” UBS said in a note.

RENEWED INTEREST

Renewed investor interest in gold was reflected in holdings of the largest gold-backed exchange-traded-fund (ETF), New York’s SPDR Gold Trust, which rose 0.63 percent to above 38.88 million ounces on Monday from Friday.

Holdings in the largest silver-backed ETF, New York’s iShares Silver Trust, fell 0.15 percent to around 325.9 million ounces on Monday.

Spot silver touched $36.365 an ounce, its highest since May 13. It was bid at $36.30 an ounce from $35.04 late on Monday and platinum at $1,763.24 from $1,748.35.

“Everyone is cautiously optimistic about PGMs (platinum group metals). We certainly don’t expect strong gains but they will move up gradually,” Kryuchenkov said.

“There are many supportive factors (PGMs). You can still justify their prices with fundamentals, and the recovery in the automotive sector is under way.”

Spot palladium was bid at $740.47 an ounce from $727.99 late on Monday.

Both platinum and palladium are used to make catalytic converters for cars, production of which is expected to rise this year and next.

(Additional reporting by Pratima Desai; Editing by Jason Neely and Anthony Barker)

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