From Bloomberg:Gold may gain as concern about Europe’s debt woes and sustained record-low interest rates in the U.S. spur demand for the metal as an alternative investment, a survey found.
Twelve of 16 traders, investors and analysts surveyed by Bloomberg, or 75 percent, said bullion will rise next week. Two predicted lower prices and two were neutral. Gold for August delivery was down 1.3 percent for this week at $1,519.70 an ounce by 11 a.m. yesterday on the Comex in New York. It reached a record $1,577.40 on May 2.
European Central Bank President Jean-Claude Trichet this week said danger signals for financial stability in the euro area are flashing “red” as the debt crisis threatens to infect banks. Policy makers decided to keep the Federal Reserve’s balance sheet at a record to spur the economy after completing $600 billion of bond purchases this month and repeated they will keep borrowing costs low “for an extended period.”
Gold will be supported “due to continuing sovereign-debt and currency risk,” said Mark O’Byrne, executive director of brokerage GoldCore Ltd. in Dublin. The Fed’s “ultra-loose monetary policies and zero percent interest rates are to continue for the foreseeable future,” he said. “This is a continuing positive for gold prices.”.......read on
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