News Header

 

Analysts Comment on Europe's Currency Focus

Release Date: 
Wednesday, February 13, 2013

Gold prices fell after data showed little growth in U.S. retail sales in January.  Gold was $8.90 lower at 1:03 p.m. Pacific Time on the New York Spot Market, at $1,643.40 per ounce.  Spot silver was $0.34 lower at $30.88 per ounce.  (Click here for the most current spot prices.)

Howard Wen, a metals analyst at HSBC, said uncertainty over a series of U.S. automatic spending cuts and resurgent physical demand should support gold prices.

A G20 meeting later this week is expected to influence the gold market.  At the G7 meeting on Tuesday, member nations stated they would not not set target exchange rates.  Recently, several industrialized nations have allowed their currencies to depreciate to stimulate their economies.  In the statement, the G-7 said members agreed “that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability” and said members would continue to “consult closely” on exchange markets and cooperate “as appropriate.”

"Although people are not expecting anything dramatic to be said at the G20 meeting, there is still some uncertainty, which may see short-term investors cover their short positions in coming sessions," Societe Generale analyst Robin Bahr commented.

David Morgan, publisher of the Morgan Report, noted, “no one can rock the boat as all currencies sink together into the ocean void. Gold will endure — it always has and it always will.”

Traders at TD Securities noted that, while physical sales of gold to India remain low, the trend may reverse in the coming months with the rupee poised to strengthen.  India is one of the world's largest gold importers, but its weak domestic currency has hurt gold buying over the last 12 months.

Currently, “the gold market is obsessing with technical levels,” said Ross Norman, CEO of Sharps Pixley.  However, his firm sees gold potentially rising in 2013.

(Sources: “Gold Prices Wobble Near Unchanged, Look To Euro For Support,” Wall Street Journal, February 13, 2013; “PRECIOUS-Gold drops below $1,650, focus shifts to equities,” Reuters, February 13, 2013;  “Gold logs slight gain, but stays below $1,650,” Marketwatch, February 13, 2013)

News Footer

 

†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.

You should review Goldine's Account Agreement along with our risk disclosure booklet, Coin Facts for Investors and Collectors to Consider ®, prior to making your purchase. Goldline has a spread or price difference between our selling price, called the "ask", and our buy-back price, called the "bid". That spread varies depending on coin or bar you acquire. Spreads on 1 oz bullion coins, 90% silver dimes and quarters, and one ounce and larger bullion bars are 13%. All other coins have a spread of 28%. There is also a 1% liquidation fee when you sell your coins back to Goldline. The market must go up enough to overcome this spread before an actual profit is achieved. Precious metals and rare coins can increase or decrease in value. Past performance does not guarantee future results. Coins are a long-term, three- to five-year, preferably five- to ten-year investment. We believe precious metals are suitable for 5% to 20% of the average investment portfolio though others may recommend a different percentage.

To receive free information package on gold and precious metals investing, call Goldline at 1-800-963-9798.