Recent trade deals and high-level cooperation between Russia and China have set off alarm bells in the West as policymakers and oil and gas executives watch the balance of power in global energy markets shift to the East.
Gold looks set to have a third week of higher closes and is heading for the longest run of weekly advances since March. Gold is up 1.6% in U.S. dollars and 2.3% in Australian dollars due to concerns about the outlook for both the U.S. and Australian economies.
The relationship between gold and equities has similarly eased...this suggests that gold's safe-haven properties are currently considered more dominant, and as such gold is considerably lagging the move in equities.
The dollar gold price fell to a one-week low below $1,735 per ounce Wednesday, as stocks and commodities also edged lower while the dollar and US Treasuries gained despite ongoing uncertainty over how the US will address its deficit problems.
Spot market prices for buying gold traded above $1,730 an ounce throughout Tuesday morning in London, up 1% for the week so far, while the euro also held onto gains made yesterday despite news that a second ratings agency has downgraded France.
Gold is relatively unchanged on Tuesday as investors await the US presidential election results, and remain cautious with news of Greece’s two-day general strike against the new austerity package plus the upcoming Chinese leadership transition.
Gold pulled back on Friday as shares in Asia were off following a three day rally as investor’s maintained positions ahead of the EU summit outcome on the euro-zone debt crisis which should support the euro.
The US dollar gold price fell further on Wednesday morning, trading at one-week lows beneath $1,550 per ounce as world stock markets dropped and the Euro hit a fresh two-year low amid fresh debt woes in the 17-nation currency union.
London quotes for wholesale gold bars held above $1,560 per ounce Friday morning, cutting the week's losses to 1.9% as European stock markets reversed their earlier rally and the euro fell to a new two-year low.