Bank of England Gives “Systemic Crisis” Warning, Germany’s Merkel says Eurozone “Will Take Years” to Solve Debt Problem, South Korea Adds to Gold Reserves

Friday, December 2, 2011
By Paul Martin

By: Ben Traynor
GoldSeek.com

London Gold Market Report

U.S.DOLLAR Gold Bullion prices eased back from a week’s high of $1760 an ounce Friday lunchtime in London – straight after the publication of US jobs data – before appearing to bounce off $1750.

Silver prices also fell back, after hitting a week’s high of $33.67 per ounce.

Nonfarm payroll data published by the US Bureau of Labor Statistics Friday show that the US economy added 120,000 jobs in November – exactly in line with market expectations.

The US unemployment rate meantime fell to 8.6% – down from 9.0% in October.

Stock markets opened strongly on Friday morning – with the FTSE 100 in London up around 1.6% by lunchtime and Germany’s DAX gaining 2.0% – while commodities also gained and US Treasury bond prices fell.

“Recent US data have been slightly more optimistic than what has been factored into the market,” said Neil Jones, London-based head of European hedge-fund sales at Mizuho Corporate Bank, speaking before the nonfarm payroll release.

“That’s helping risk…the market is in the process of reducing its risk-off positions.”

Despite its slight drop following the nonfarm release, gold bullion looked on course for its biggest weekly gain since October – having risen nearly 4% since last week’s close.

“The market is betting on some kind of announcement from Europe,” reckons Saxo Bank analyst Ole Hansen.

“[Investors are] looking for the liquidity button in Europe to be pressed. That will mean high inflation, and that is giving gold the impetus it has been lacking of late.”

The Rest…HERE

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