GOLD HEADED FOR BEST WEEK SINCE AUGUST
Gold prices are near-unchanged Friday, as continued safe-haven buying battled against profit taking from investors taking advantage of gold’s best week since August. “Gold’s had a good rally, and a small pullback would be healthy for the market,” Afshin Nabavi, a senior vice president at bullion refiner MKS Finance SA in Geneva, told Bloomberg. Still, “people won’t give up their safe-haven investments,” and that will support prices, he said.
Yesterday’s announcement of an agreement on the European debt deal was met by investors with optimism. Today, however, euphoria seems to be giving way to uncertainty over whether the plan will be comprehensive enough to stem the fallout of the debt crisis in Europe. Jim Pododa, a former precious metals trader for Mitsubishi International Corp. told Bloomberg via Email, “The European debt deal should help gold in two ways. For the non-believers, safe-haven buying should keep the market well bid. For those thinking that impediments to growth have been lifted, the further stimulus should be viewed as gold-positive as well,” he said. (Bloomberg, 10/28/11)
U.S. stocks are mixed following Thursday’s massive rally as doubts over the lack of details on the European debt deal raised concerns for investors. "I think investors are taking a step back, in the sense that they're getting down to the details that were in the plan yesterday," Adrian Cronje, chief investment officer at Balentine told CNN Money. Investor sentiment was further dampened on Thursday’s reports that an agreement by the U.S. debt super committee on how cut over a trillion dollars from the country’s deficit may not be finalized prior to the November deadline. Further questions remain as to whether cuts of anything less than $4-6 trillion will be enough to stabilize the country’s ballooning debt. (CNN Money, 10/28/11)
†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.
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