Posted on 2009-01-05
The price of the yellow metal trading week in the London Stock Exchange for metals fell, extending the decline for a third day in a row under the signs of recovery in the dollar against the euro, which made the demand driven by investment in the market for the metal.
The recovery of the dollar in reaction to the plan announced by President-elect Barack Obama, has adopted a package of operations spending on infrastructure projects and measures to reduce taxes in order to contribute towards the creation of 3 million jobs.
Estimates reported by Bloomberg news network that the price of the yellow metal, which is heading in the opposite direction of the movements of the dollar has fallen about 2.3% over the five days since the start of the new year while the price of U.S. currency by about 2.1% against the euro during the same period.
The decline in spot price of the metal yellow in London with the first trading week at 12.7 dollars, or 1.5% to reach 862.64 dollars as the price of futures contracts for the month of February in the New York Mercantile Exchange to 17.10 dollars, or 1.9% to $ 862.4 dollars.
Despite the marked decline of the yellow metal at the beginning of this year, but one analyst at Standard Bank Group in Johannesburg finds that more of the recovery in oil prices should help support gold prices, especially with the increasing volatility of exchange markets.
The price of the yellow metal was reduced in the last year by 5.8% as it considered it the eighth consecutive annual increase, despite the unprecedented landslides that swept most of the investment instruments universally recognized, particularly equity markets, which this year lost almost 30 trillion dollars, it has become clear that the yellow metal can be regarded as a safe haven only one who succeeded to a large extent resistant to flood damage, which did not survive him until the currency markets.
Perhaps what that fact is that the yellow metal has risen this year at 3.8%, which fort is clearly the investor's funds in the metal away from the financial markets and the collapse of exchange especially with the trend of falling interest rates globally.
Despite the rise that made the yellow metal for the eighth consecutive year but 2008 is the lowest altitude of 2001 enabling the metal to continue to attract funds seeking to diversify investments to avoid further declines in currency and capital markets.
The proportion of the high price of the yellow metal in 2008 were denominated in euros and pound sterling, and that approximately 7.8% as the report of Bloomberg News Network reported.
And on the performance of other major minerals could not, of course, platinum user mainly in car manufacturing processes to withstand the wave of recession sweeping the industrialized economies and emerging fall of gold prices during 2008 by about 4.1%, which is the largest decline since 1998, also fell by about 50% Albuladion has fallen price of silver during the year by 26%, This is the worst performance of the metal since 1984.
It is clear that the geopolitical factor will remain a paper support for the yellow metal under an atmosphere of tension experienced by the Middle East against the backdrop of the current Israeli Alaadaon on the Strip, in a time when Hindi Pakistani border on high alert for possible military confrontation.
It is well known and also estimates the World Gold Council, India's largest consumer of yellow metal in the world with a share in last year's total purchases of the metal by 20%.
Another factor that will support the movement of the yellow metal and will strengthen its position as a safe haven investment during the current phase is the continued uncertainty in financial markets are in store for the global crisis of the repercussions of a new heading at the time when the interest rate on most major currencies especially the U.S. dollar to decline as interest rate close to zero.
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