New Greek Crisis “Biggest Risk for Gold”, Bank of England “Has Left Door Open” for More QE, Goldman Sachs says “Long Gold Position Recommended”

Wednesday, February 22, 2012
By Paul Martin

By: Ben Traynor, BullionVault
GoldSeek.com
Wednesday, 22 February 2012

London Gold Market Report

U.S. DOLLAR gold prices held steady just off $1760 an ounce during Wednesday morning trading in London, after a rally in Tuesday’s US session saw gold climb 1.3%.

Silver prices softened slightly but held above $34 per ounce – having through that level on Tuesday following the Greek bailout announcement. Stocks and commodities edged lower this morning, while government bond prices gained.

Gold prices “[ran] into sell stops at the $1760 level,” says one gold dealer here in London.
“We don’t see a substantial amount of enquiries in the physical market,” adds Dick Poon, Hong Kong-based precious metals manager at refiner Heraeus.

However, “a break of $1763 will bring in fresh buying,” reckons the latest technical analysis from bullion bank Scotia Mocatta, “looking for a test of November high $1803.”

Greece has been given nine days to meet a list of conditions before it can receive its €130 billion agreed by Eurozone finance ministers yesterday. The list includes sacking underperforming tax collectors and readying state-owned companies for privatization in the summer, the Financial Times reports.

“The [Greek] deal may have removed near-term uncertainty,” adds Helen Roberts, head of government bonds at F&C Asset Management in London, “[but] it’s a hard environment to implement austerity measures. It’s a worry that the Greek government might not be able to do much even though they are fully committed to the agreement.”

“The greatest risk to the downside that we see for gold is a fresh Greek crisis,” warns HSBC precious metals analyst James Steel.

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