By Adrian Ash<\/p>\n
BullionVault<\/a> THE PRICE OF GOLD fell back towards Friday’s 1-week low in Asian and London trade on Monday, holding above \u20ac1000per ounce for Euro investors as Irish bonds rallied but the single currency continued to drag along 7-week lows to the Dollar.<\/p>\n US stock markets opened higher after their worst week in 3 months, as new data showed a surprise jump of1.2% in Retail Sales, plus a 0.9% rise in Business Inventories.<\/p>\n Following its worst week in only a month, the gold price<\/a> in Dollars initially jumped in Asia to $1375 on Monday morning, with \u201cbargain hunting evident\u201d according to one dealer.<\/p>\n But it slid back to $1361 per ounce as base metals and emerging-Asia stock markets fell, and the US currency recovered a 6-week high to the Japanese Yen at \u00a583.<\/p>\n The silver price<\/a> in Dollars tracked gold closely, first rallying from last week’s 2.7% loss only to slip back below $26 per ounce, almost 12% below last Tuesday’s near-record peak.<\/p>\n \u201cThe Euro\/Gold correlation has been seen breaking down,\u201d says a London trader, \u201cbut not nearly to the extent that it did at the height of the Greek crisis \u2013 not yet, at least.\u201d<\/p>\n \u201cThe [gold] market continues to trade alongside the single currency,\u201d says VTB Capital’s Andrey Kryuchenkov in London, speaking to Bloomberg.<\/p>\n “[But] in the long run, gold is still looking positive…in case fears in the Eurozone escalate.\u201d<\/p>\n Dublin’s government denied on Sunday night it was seeking European or IMF aid, asserting that Ireland is \u201dfully funded until well into 2011.\u201d<\/p>\n \u201cWe must show clearly that Ireland can stand alone and it\u2019s determined to get out of the financial difficulties we are in,\u201d said Batt O\u2019Keeffe, business minister,to Dublin radio today.<\/p>\n Gold investment<\/a> demand in Germany \u2013the Eurozone’s No.1 economy, where hotly-denied rumors say Berlin is pressing Ireland to accept a rescue \u2013 \u201cagain resurfaced after an exceptionally calm summer\u201d in late Oct. and early Nov., says Wolfgang Wrzesniok-Rossbach at refining-group Heraeus in Hanau, \u201cbut it is still very far from its high volumes\u201dof May and June’s Greek deficit crisis.<\/p>\n \u201cGold Bars of almost all denominations are in demand,\u201d writes Wrzesniok-Rossbach in his latest published weekly report. \u201cAs far as the smaller bars are concerned, the coming Christmas season is probably drawing in buyers.\u201d<\/p>\n Over in base metals, continued rumors of tighter monetary policy in China following last week’s stronger-than-expected inflation data forced Shanghai zinc prices 7% lower, triggering the market’s \u201climit down\u201d block on further falls.<\/p>\n \u201cCopper premiums in Asia have [also]continued to come under pressure,\u201d writes Leon Westgate at Standard Bank.<\/p>\n \u201cOminously, its perhaps worth pointing out that the last time…Shanghai premiums [over London prices] were this low was in mid-April, shortly before copper fell out of bed and dropped from $7,500 to just above $6,000 in the space of 6 weeks or so.\u201d<\/p>\n London copper futures slipped to $8,586 per tonne on Monday morning.<\/p>\n \u201cInvestors have become increasingly concerned about sovereign default and they think that most currencies should fall against the [Chinese] Renminbi,\u201d says Danny Gabay at Fathom, an economics consultancy in London, quoted by the Financial Times<\/em>.<\/p>\n \u201cBut since non-convertibility means they can\u2019t buy the Renminbi, they buy gold<\/a> instead, which can\u2019t be debased.\u201d<\/p>\n Research from market-development group the World Gold Council showed in March that Dollar gold prices<\/a> were more tightly correlated with the Shenzen and Shanghai stock markets over the previous 5 years than with either crude oil or the GSCI commodities index.<\/p>\n Adrian Ash<\/p>\n BullionVault<\/a><\/p>\n Gold price chart, no delay<\/a> |\u00a0\u00a0 Buy gold online at live prices<\/a><\/p>\n Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK’s leading financial advisory for private investors, Adrian Ash<\/strong> is the editor of Gold News<\/a> and head of research at BullionVault<\/a> \u2013 winner of the Queen’s Award for Enterprise Innovation, 2009 and now backed by the mining-sector’s World Gold Council<\/a> research body \u2013 where you can buy gold today<\/a> vaulted in Zurich on $3 spreads and 0.8% dealing fees.<\/p>\n
\nAs Ireland Refuses Bail-Out, Dollar Gain, China Rate Fears Hit Base Metals<\/p>\n