Update 29 June

Gold

Gold is back around USD$1,238 (bid) / USD$1,244 (ask) after breaching USD$1,262 on Monday (in the early hours of Tuesday NZT). A large drop of more than twenty dollars after reaching the USD$1,262 in a few hours was due to profit-taking.

Reuters reports: "Gold is likely to remain pretty well supported in the current quarter. Safe-haven demand for gold remains prominent," said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney, adding that Monday's decline did not represent a fundamental change in gold views.

CBA Commodities reports "We expect that safe-haven demand will support the gold price at around current or higher levels in the coming quarter. But that the gold price may fall back over the course of 2011 as improvement in the international economic environment reduces safe-haven demand."

However, thebulliondesk.com cautions "Last week's reports on the US economy suggested its recovery may stutter and traders have turned cautious in case the trend is confirmed this week."

Currency

Reuters reported that the NZD/USD opened around 0.7088 and traded a narrow 0.7067/0.7106 range for the entire NY day Kiwi tracked Aussie for most of the day slipping briefly at the NYSE open then recovering toward the London close.

NZD Gold

With currency trading fairly tightly, the NZD price has been tracking the USD price and currently gold is sitting close to our report last Friday at NZD$1740 (bid) / NZD$1778 (ask).

Economies

Take a look at this interesting and amusing video from over the ditch

Gold lifts as investors move out of euro

Gold
The gold price has strengthened to USD$1237 as investors move out of euros after learning Moody's downgraded several Greek banks after cutting the government's credit rating to junk.

Gold still remains relatively range bound between USD$1220 and USD$1240. The next resistance level USD$1250 was broken through on June 8th, but without strong backing this looks to be a way off from reoccurring.

Currency
Light trading of the NZD overnight saw it pick back up to just below the 0.70 mark again to 0.6933, which feels like a long way off from the lows of the last few weeks.

NZD Gold

In spite of a rise in the gold price since Monday, a stronger NZD is again making gold cheaper to buy locally at NZD$1785.

Interesting Developments

• MIT in the US has found that using gold and platinum nanoparticles could make the lithium-air batteries used in electric vehicles significantly more effective. Commodity Online Story
• The number of bank closures in the USA has increased significantly in the past 3 years, see this Nifty Flash Map
• The fed reserve has sold 1.15bn in a Term Deposit Auction Bloomberg Story

Update 9 June 2010

Gold


Spot gold rose to a lifetime peak of $1,252.30 per ounce overnight  as poor European economic releases compounded already fragile investor mood before settling back despite another brief run-up to $1,245.20/1,246, still up $5.30 from the previous session.


Last time we provided an update the gold price was at USD$1208, so why the big change? Firstly, there was a large upward swing late Friday (Saturday New Zealand time) due to poor jobs figures in the US, which sent the dow tumbling and gold right up. Secondly, the European debt crisis seems to be getting worse, not better, with Hungary joining the list of possible defaults.


Analyst Walter de Wet of Standard Bank commented "While we could see some profit-taking, especially in the physical market as gold targets new highs, we do not expect a steep decline in the gold price as we did in May," he added. "Globally risk remains high, and gold and the dollar are reaping the benefits."

Gold also set new lifetime highs across a multitude of currencies as risk aversion surged, including Canadian dollars, the yuan, Swiss francs, sterling and the euro, while also setting multi-month peaks in Australian dollars and rupees.

Currency

The New Zealand dollar has dropped from last week's 0.68 and has been trading at around 0.66 for much of this week. Tomorrow all eyes will be on the Reserve Bank as the decision on whether or not the raise the OCR is made.

NZD Gold

Spot gold in is up around NZD$1885, which is a $120 increase on the price given in last Friday's update. This is however is still a way off the NZD$1950 we saw in February of last year when the dollar was around USD$0.50