Los Angeles, CA – Gold Futures rallied from a 5-week low Wednesday morning on renewed optimism that Greece will be able to manage its debt issues and on a report that showed an overall increase in U.S. hiring. April gold futures traded higher by $13.50 or 0.8% to $1685 an ounce on the Comex division of the NYME. Silver also moved up 60.7 cents or 1.8% to 33.40 an ounce.
Gold and silver prices fell sharply last Wednesday after traders viewed Federal Reverse President Ben Bernanke’s comments on the economy to indicate less of a chance of an additional round of quantitative easing (QE3). Both precious metals slid again Tuesday morning this week after risk sentiment was hurt by uncertainty over whether there would be sufficient private sector participation on Greece’s debt issues, as well as news of additional talks between world powers concerning Iran’s nuclear program.
News out of the Eurozone today stated that Investors with holdings amounting 39.3% of Greek bonds eligible for the nation’s debt swap agreed to sign on, moving the country closer to the largest sovereign restructuring in history. Positive news out of Greece boosted the Euro, which pushed down the U.S. Dollar index down, causing a positive boost for Gold. “Every time they want to bury Greece, the euro moves down and the dollar moves higher,” stated Mike Daly, gold/silver expert with PFGBEST. “And a higher dollar means weaker gold. But the news (for the euro) is a little better today. It seems like any time the news out of Greece is better, it supports gold.”
In the U.S., news that companies added 216,000 workers last month according to data based on payrolls from ADP Employer Services helped push Gold prices higher this week. “There is some positive news out there for the economy, and that is helping gold,” said Frank Lesh, trader at FuturePath Chicago in a telephone interview. “Some investors are back after the big fall.” Trader buying in the form of bargain hunting was also cited as a reason for the climb in the price of gold after the sharp decline to a 5-week low.
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