Shares in mining and trading company Glencore fell almost 30% and closed at a record low on Monday over concerns it is not doing enough to cut its debt to withstand a prolonged fall in global metals prices.
The wholesale-market gold price leapt more than 1%, setting three-week highs above $1620 per ounce after European Central Bank chief Mario Draghi said "The ECB is ready to do whatever it takes to preserve" the single euro currency.
Given that the phrase “Sell in May and go away; don’t come back till St Leger’s Day” is probably the best known of the seasonal trading strategies and that another strong rally has started to tail off, we thought it wise to investigate whether investors should pay it heed.
Gold prices climbed to $1,660 per ounce Wednesday morning in London – in line with where they ended last week – before drifting lower ahead of US open, while stock, commodity and government bond prices were broadly unchanged.
Gold prices hovered just below $1,760 per ounce during London's Wednesday morning trading, after a rally in Tuesday's US session saw gold gain 1.3%. Silver prices softened slightly but held above $34 per ounce.
Stocks and commodities fell and longer dated US Treasury bonds rose after US Federal Reserve chairman Ben Bernanke made no specific reference to a third round of quantitative easing (QE3) at a press conference on Wednesday.
Gold prices traded in a tight range around $1,537 per ounce Monday morning in London while stocks and commodities fell and US Treasury bonds rose after eurozone finance ministers delayed a decision on financial aid for Greece.
Gold has breached the $1,500/oz level and reached new record nominal highs at $1,505.65/oz. Since yesterday it has gradually risen in all currencies and is approaching record nominal highs in all major currencies.
Gold ticked lower momentarily to $1,417.63/oz on the open in Asia prior to rising to over $1,432/oz where determined sellers sold aggressively, sending gold back down to near Friday's closing price on the London AM Fix.