London 07/06/2011 - Further flight-to-quality buying lifted gold to a one-month peak during Mondays US session, amid growing concerns over slowing economic momentum in the US and the possibility of another round of quantitative easing. The yellow metal traded to a peak of $1553.80, setting a new lifetime peak in Sterling terms, but reversed the majority of its gains by the close as the dollar recovered ground. Gold closed up 0.2%, silver 1.1 % while platinum closed down 0.4%; palladium finished up 1.1% after hitting a one-month high of $798.50. In broader markets US economic growth concerns led to further risk aversion with equities under pressure again, the Dow finished down 0.5% and the S&P500 1%. Similar pressure was seen in commodities as a result of the risk aversion and rebound in the dollar, the CRB Index finished down 0.9%. The DXY closed with a modest 0.4% gain; EUR/JPY was off 0.6%. Equities have seen a mix start overnight however there are signs of some risk appetite after ECB President Trichet indicated his willingness to sanction bond rollovers in Greece; the Nikkei was up 0.6% at the time of writing, the MSCI Asia Pacific Index was off 0.2%. Trichet's comments and the more hawkish monetary stance of the ECB over the Fed have lifted the euro this morning with the single currency up 0.4% against the dollar and 0.5% versus the yen. Meanwhile the Australian dollar has lost ground against the greenback after the RBA left interest rates unchanged while Governor Glenn Stevens gave a less hawkish commentary and inflation expectations "The bank expects that, as the temporary price shocks dissipate over the coming quarters, CPI inflation will be close to target over the next 12 months,". In addition to the RBA announcement Australian AIG Construction Index declined 2.1% from a previous 5.2% gain, Japanese Leading Indicators declined from 100.1% to 96.4%. Data across the rest of the day includes Eurozone Retail Sales; German Factory Orders, US IBD/TIPP Economic Optimism and Consumer Credit. In addition Fed Chairman Bernanke is scheduled to speak. Speculation over the US economy plus ongoing efforts by Greek officials to agree on austerity measures in order to secure further financial aid look set to keep overall risk appetite mixed in the short-term. As a result trade in the precious complex is set to remain volatile with the metals at risk to bouts of liquidation should equities lose further ground; however gold continues to be boosted by pockets of investment demand as investors diversify their portfolios and continues to test towards its all-time high of $1575.30.

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