by Adrian Ash<\/p>\n
BullionVault<\/a><\/p>\n Tues 17 May, 05:30 EDT<\/p>\n Gold “Still Poised for New Highs” as UK Inflation Jumps, Eurozone Bail-Outs Roll On<\/strong><\/p>\n <\/strong><\/p>\n THE PRICE OF WHOLESALE<\/strong> gold bullion<\/a> was little changed below $1500 per ounce on Tuesday morning, but fell for non-US investors as the Dollar eased back on the currency market and European equity markets cut their earlier losses.<\/p>\n Asian stock markets ended the day lower for the fourth session running, and major-economy government bonds also slipped, as did crude oil.<\/p>\n Silver prices<\/a> whipped around $34 per ounce, one-third below last month’s 31-year highs.<\/p>\n “[Gold Bullion] still seems poised to test new record high prices in the current environment which is still ‘gold friendly’,” writes Andrea Aratoli at Italian bullion dealers Italpreziosi in Arezzo.<\/p>\n For silver, however, “The increase in industrial demand alone could not justify a rise of more than 180% from August 2010…We\u00a0 believe that in the short ton medium\u00a0 term, silver will enter a lateral phase…characterized by high volatility.”<\/p>\n Calling it an “improbable” scenario, Aratoli warns that “Of strategic importance [is] silver holding the support area of $33.60, which \u2013 if lost \u2013 could theoretically deny all the bullish movement of 2011 and decrease to $26.”<\/p>\n Gold bullion<\/a> priced in Euros today fell back from a rally to \u20ac34,000 per kilo as the single currency bounced from two-month lows vs. the Dollar.<\/p>\n The gold price in Sterling<\/a> meantime slipped to a 3-day low of \u00a3917 per ounce as the Pound rose following the worst rise in UK inflation since Oct. 2008.<\/p>\n Led by travel costs, plus a record jump in the prices of cigarettes and alcohol, the Consumer Price Index rose by 4.5% per year in April, extending its rise above the Bank of England’s upper tolerance \u2013 set at 3.0% per year \u2013 to 16 months running.<\/p>\n The Bank, however, has now kept its key lending rate unchanged at a record low of 0.5% throughout that time.<\/p>\n “It will be important to keep an eye on Eurozone inflation estimates this week,” reckons Andrey Kryuchenkov at VTB Capital in a note to clients.<\/p>\n “In the meantime, we continue to swing back and forth with risk sentiment while still expecting range trading to continue from here.”<\/p>\n With International Monetary Fund chief Dominic Strauss-Kahn in a New York awaiting trial for attempted rape, Eurozone politicians met without him on Monday to agree the \u20ac78 billion ($111bn) bail-out loan to Portugal.<\/p>\n “Gold fell on Monday,” reports MarketWatch, “on worries that Greece might post gold as collateral” on fresh loans, 12 months after its first \u20ac110bn loan of 12 months ago.<\/p>\n July 1991 saw the Reserve Bank of India pledge 67 tonnes of gold bullion<\/a> as collateral to the International Monetary Fund, repaying the $2.2 billion emergency loan within a matter of months but continuing to hold that metal at the Bank of England in London.<\/p>\n In July last year, commercial banks in the Eurozone \u2013 perhaps borrowing metal from their local central banks \u2013 used 346 tonnes of gold bullion<\/a> to raise $14 billion in cash loans from the Bank for International Settlements.<\/p>\n Come Nov. last year, derivatives exchange ICE Clear Europe began accepting gold bullion<\/a> as collateral from speculative traders. US investment bank J.P.Morgan did the same for its clients in Feb. 2011.<\/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 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 World Gold Council<\/a> market-development and research body \u2013 where you can buy gold today<\/a> vaulted in Zurich on $3 spreads and 0.8% dealing fees.<\/p>\n