Gold Rises

May 25, 2010 – Gold rose $8.30 (0.7%) Tuesday, rising to $1203.60 an ounce. The rise comes in the heels of reports that Athens Stock Exchange General Index may fall more after 30% drop already this year, this in spite of the 14.5 billion euros rescue package already available to Greece.

Charles Nedoss of Olympus Futures in Chicago said gold’s “trend is still intact.”

The announcement of the EU-IMF bailout fund was enthusiastically received by investors. But the enthusiasm quickly dissipated however, causing stocks and the euro to drop in value.

Sentiments about the bailout package remain fragile and doubts persist on its effectiveness. There are growing fears that the euro might be at great risk as a reserve currency. The bailout package has since failed to reassure sliding markets, with Europe’s growth prospects further stymied by belt tightening measures announced by Spain, Portugal, Italy and France.

Market Watch reported that Bank of America-Merrill Lynch had advised clients that uncertainties over the fiscal situation and future of the euro-zone are likely to continue to affect investors’ willingness to maintain the current share of euro-denominated assets in their portfolio.”

The report added that “gold may be an asset benefiting from this trend. Hence, we reinforce our medium-term gold target of $1,500 (an ounce).”

Gold, according to Phil Streible of Lind-Waldock, is not vulnerable to currency-to-currency moves. It is “not like a piece of paper driven by shaky politicians and unstable governments. I feel a lot more comfortable having gold than the euro currency right now.”

Gold had its finest hour May 11 & 12, it staged a two-day surge Tuesday and Wednesday. The yellow metal reached on Wednesday the $1243.10 level to eclipse the previous all-time high of $1226.40 posted on December 3, 2006 by $16.70 (1.36%).

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net