Friday, February 12, 2010

Gold Moving Up on Sovereign Risk

Gold and Sovereign Risk

Gold futures roared back to just under $1,100 as concerns over Greece and uncertainty coming out of Spain have overcome the usual move in the opposite direction of the dollar and gold took on a life of its own in response.

April delivery for gold increased by $18.40 to end the session at $1,094.70 an ounce on the Comex division of the New York Mercantile Exchange.

What all of this says when you come right down to it is gold is trading on risk alone during these days, and the other factors are largely being set aside until the Greek and European situation is cleared up.

With no easy or quick fixes, only announcements they're going to do this or that, this could be an extra catalyst to drive gold up which wasn't being looked at by many investors in gold.

Sovereign risk will from now on be considered a key part of the gold story, and that will definitely shore it up even more, no matter what happens with the U.S. dollar.

Unsurprisingly, silver futures also responded to the situation by rising in price, along with a number of other commodities in relationship to the same circumstances.

Gold and Sovereign Risk

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