Gold edged higher today despite a slight increase in the US dollar index, which measures the greenback’s strength against a basket of six other currencies.
Gold was supported by expectations of a pick up in demand from Indian jewellers and speculation that the Federal Reserve could consider launching another round of quantitative easing, which would boost the yellow metals’ appeal as an inflation hedge.
The safe-haven US dollar, which has an inverse relationship with gold, got a boost from today’s note from Moody’s.
The rating agency said there was an increased chance that Greece could have to leave the euro zone and cut its outlook on the sovereign ratings of Germany, the Netherlands and Luxembourg to ‘negative’ from ‘stable’.
Moody’s added that Germany and other AAA rated countries may have to provide more aid to struggling European economies.
In addition, Markit reported that the euro zone composite PMI for this month came in at 46.4, unchanged from June, while the German PMI dropped to 47.3 from 48.1 in June.
Gold traded at US$1,578/oz this afternoon, up US$2 from Monday’s close. Other precious metals moved in the opposite direction to gold with silver falling six cents to US$27/oz and platinum dropping US$4 to US$1,390/oz.
Today’s top risers in the sector were:
African Mining and Exploration (LON:AME), up 30.5 percent at 3.1 pence at midday
Greatland Gold (LON:GGP), up 13.5 percent at 0.68 pence
Oxus Gold (LON:OXS), up 12.5 percent at 1.91 pence
Condor Gold (LON:CNR), up 10.5 percent at 119.9 pence
ECR Minerals (LON:ECR), up 7.5 percent at 0.75 pence
The top fallers were:
Premier Gold (LON:PGR), down 16.5 percent at 0.255 pence at midday
KEFI Minerals (LON:KEFI), down 6.5 percent at 2.78 pence
Trans-Siberian Gold (LON:TSG), down 5.5 percent at 48 pence
Mariana Resources (LOON:MARL), down 5 percent at 4.5 pence
