Gold Prices Rise Amid Concerns Over Greece's Sovereign Debt and German Economic Recovery

Strategic Insights -

Investors' interest in riskier assets waned amid concerns over Greece's sovereign debt and the German economic recovery, causing gold prices to pare overnight gains. However, gold found support as investment flows into platinum and palladium piqued interest in precious metals. Benchmark February gold prices rose $3.40 to $1,133.90 per pound on the Comex division of the New York Mercantile Exchange.

Key Takeaways:

  • Gold prices rose $3.40 to $1,133.90 per pound on the Comex division of the New York Mercantile Exchange, as investors turned to safe-haven assets amid concerns over Greece's sovereign debt and German economic recovery.
  • Investors are buying gold, platinum, and palladium as low interest rates and emergency government liquidity measures have pumped cash into markets, causing a rise in commodities prices.
  • Platinum and palladium futures are markedly higher due to support from new physically backed U.S. exchange-traded funds, with Nymex April platinum up $29.20 at $1,625.30 an ounce and March palladium up $8.20 at $455.95 an ounce.
  • ETFS Physical Platinum Shares and ETFS Physical Palladium Shares, the first exchange-traded funds for the platinum group metals in the U.S., create additional investment demand since physical metal is put into storage to back shares that trade like a stock but track the price of the commodity.
  • Tom Pawlicki, an analyst with MF Global, stated that some support from platinum and palladium is spilling over into gold.
  • The rise in precious metals prices is attributed to investors seeking safe-haven assets and higher returns in a low-interest-rate environment.

Statistics:

  • Gold prices rose $3.40 to $1,133.90 per pound on the Comex division.
  • Platinum prices rose $29.20 to $1,625.30 an ounce on the Nymex.
  • Palladium prices rose $8.20 to $455.95 an ounce on the Nymex.
  • ETFS Physical Platinum Shares and ETFS Physical Palladium Shares are the first exchange-traded funds for the platinum group metals in the U.S.

Sources:

  • Dow Jones Commodities News via Comtex
  • Matt Whittaker, Dow Jones Newswires; 212-416-2139; matt.whittaker@dowjones.com
  • MF Global
  • Nymex
  • New York Stock Exchange Arca