Gold prices: the forecast for today

Gold remains in a stable investment

In brief: Gold prices depend on several factors. Positive dynamics of the market of precious metals due to the constant change in the trend in other markets.

Gold prices remain stable. Gold has three points of dependence. 1 – gold as an asset of refuge – Gold prices fell as market participants feel less need to buy gold as an asset of refuge as investors are satisfied with the fact that aggravation of Europe’s problems are not observed yet, even temporarily;

2 – fixing the profit – on Tuesday the market of precious metals (gold) reached the highest level of closure for two weeks, but the breaking news that can severely frighten markets on Thursday the European continent was not presented – that led some market participants to close the previously open long positions in order to commit profit; 3 – Strengthening of the dollar on the Forex market against the backdrop of economic output makrostatistiki and news also hurt prices of yellow metal (gold prices usually move in the opposite direction from the U.S. dollar, as the strengthening U.S. currency makes gold more expensive for holders of other currencies). Prices of other precious metals, which are widely used in industry – silver and platinum group metals – also closed with a decrease in price, following the price of gold.

From news can note that the Chinese state mining company, Jinchuan and China Development Bank (China Development Bank, CDB) intend to invest 877 million dollars in a platinum industry in South Africa. This will be the second largest Chinese investment in Africa in addition to the energy sector. Jinchuan plans to obtain 51% of Wesizwe, a small South African company, with over 277 million dollars, while CDB is going to attract to the project 650 million dollars to finance key platinum mine Frischgewaagd-Ledig, which is located to the west of Pretoria. This is a very strategically important transaction, since China first direct access to the platinum industry. In recent years, Chinese investment in Africa has increased steadily, as Beijing tries to provide themselves with all the necessary supplies of energy and commodities. Traditional buying precious metals from hedge funds, the use of gold as an asset of refuge as well as decrease the U.S. dollar will provide sustained support for quotations of gold and silver. However, the situation could change dramatically if the dollar will resume its strengthening, as the inverse correlation between the dollar and the prices of precious metals continues. Volatile changes in the currency market may be reflected in the sharp fluctuations of prices for precious metals.

Ukrainian Globalist
2010-06-06 21:12, Commodities.

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