Some analysts posit that uncertainty over the timing of the U.S. Fed’s first interest rate hike in 10 years is weighing on gold but this uncertainty appears to be exaggerated, especially given the fact that much of the economic data this week out of the U.S. and China has been negative and suggests the U.S. and global economy are weakening again.
This would be bearish for stocks and bonds and bullish for gold.
In Singapore gold was at $1,200.80 an ounce near the end-o f-day trading. In late European trading gold is at $1,205.31 an ounce or up 0.52%. Silver is at $16.44 an ounce or up 0.87% while platinum at at $1,165.67 an ounce or up 0.41%. Gold remained firm above $1,200 an ounce today with the weaker dollar, negative economic data and concerns about a Greek debt default supporting this week. Greece’s government has been dead locked in talks over harsh measures to its bailout loans. Germany’s Finance Minister said an agreement next week would be unlikely increasing the likelihood of a default.
European markets were sharply lower in morning trade, as investors become increasingly nervous about the funding crisis in Greece and the Chinese economy. Falls in Chinese stock markets and an outage on Bloomberg financial terminals did not help increasing market jitters.
There is also some nervousness creeping in about the risk of over valuations and developing bubbles in stock and bond markets globally – not to mention a developing global property bubble.