The price of spot gold is higher today, tracking the stronger euro, but this trend may not continue. Monday represented a quiet trading day on the London exchange and worldwide markets will be watching Wall Street today following the July 4 holiday. The price of gold continues to hold at over $1,200 per troy ounce.
Monday’s European market activity has led analysts to conclude that Tuesday will hold further consolidation. Many feel that gold speculators and investors will pare their stale longs. However, the price of gold is already up $2 per ounce since the London Stock Exchange opening today.
The U.S. Institute for Supply Management will release its non-manufacturing data today. The markets are expected to take their lead from these figures, per Daniel Major, RBS metals analyst. The stronger euro resulted in the gains in gold price early in the day.
Gold is not the only precious metal that is seeing an increase in price. Silver, platinum, and palladium have all followed suit. Palladium and platinum have recently been under pressure and may continue to experience this due to lower than anticipated Chinese car sales figures. The June numbers represent an 11 percent increase when analyzed year over year, but a five percent decrease when compared to May 2010. The primary use for the two precious metals is in the manufacture of autocatalysts.
Investors continue to buy gold coins, gold mining stocks, and gold ETFs in order to hedge their exposure to the decline in U.S. currency. As the price of gold continues to rise, these practices will continue. The gold price has not yet peaked and it remains anyone’s guess as to when it will. Some are predicting a double dip recession, so it will be interesting to see what effect this will have on the price of gold and other precious metals.