Gold prices got back on track after slipping below US$1,150/oz on Tuesday, when investors paused following a buying spree that sent the yellow metal to 2010 highs at nearly US$1,170/oz. Precious metals came back in demand today as the US dollar declined after investors switched to riskier assets following a positive earnings report from chipmaker Intel (NYSE:INTC) and gains in the euro on optimism inspired by the EU’s decision to provide financial aid for debt-laden Greece. Late last week, rating agency Fitch cut Greece’s sovereign debt to BBB- from BBB+ after downgrading Portugal to AA with a negative outlook last month. The decision came shortly after President of European Central Bank Jean-Claude Trichet said that the debt-laden country did not require financial aid at this moment. Euro zone states have previously agreed to provide Greece with an emergency loan should it be unable to raise enough money in the market. The downgrade, however, has made it harder and costlier for Greece to raise funds as the demand for its bonds reportedly weakened even before Fitch’s decision, leaving the EU with little choice but offer a €30 billion loan fasility to help the troubled country meet its commitments this year. Gold, which is seen as an investment alternative to the US dollar and normally moves inversely to the American currency and in tandem with the euro, is now increasingly seen as a currency hedge amid volatility in currency and equity markets, which has led to heavy safe-haven buying. Investors got more bullish cues from the world’s largest consumer India, which said that its demand for the yellow metal has grown further as the country’s gold imports increased to 27.7 tonnes in March from just 4.8 tonnes a year ago. Rising physical demand from Indian jewellers has contributed to gold’s recent rally. Gold improved to US$1,158/oz, while silver and platinum advanced to US$18.39/oz and US$1,727/oz respectively. Most major mining companies rose today. Gold producer Randgold Resources (LSE: RRS) added 1.2%, while silver miner Fresnillo (LSE: FRES) and platinum producer Lonmin (LSE: LMI) posted gains of less than 1%. Specialty chemicals firm Johnson Matthey (LSE: JMAT) made little headway. Aquarius Platinum (LSE: AQP) led the midcaps, advancing 3%. Silver producer Hochschild Mining (LSE: HOC) added less than 1% and gold miner Petropavlovsk (LSE: POG) was flat. South American based explorer Mariana Resources (AIM: MARL) led the juniors with an 11.5% rally after announcing a joint venture with American mining company Cliffs (NYSE: CLF). Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEFI), which today updated investors on its Saudi Arabian operations, followed, adding 7.5%. Turkey focused gold miner Ariana Resources (AIM: AAU) and African focused nickel and gold exploration and development junior Nyota Minerals (ASX&AIM: NYO), which today announced that The World Bank’s IFC will invest more than £3 million into the company for a 10% stake, both tacked on more than 5%. Kyrgyzstan focused gold explorer and developer Chaarat Gold Holdings (AIM: CGH) slipped 7.5% amid the ongoing political crisis in its country of operation.

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