Geopolitical risks help Gold, Silver to recover from below $1300/Oz…


Gold, Silver prices which dipped below $1300 levels rebounded last week thanks to geo political tensions. ETF Securities Ltd said in a weekly report that gold price recovered as geopolitical risk buffeted investor confidence. Contrary to the consensus view at the onset of 2014, gold ended the week still up about $100 on the year. A key shift has been the widely unexpected decline in real interest rates.

Last week, German Bund yields dipped to new historic lows and US 10 year bond yields have also dropped sharply. In addition, recent flows into gold exchange traded funds (ETFs) have been positive. Some equity money has been moving back into gold and the precious metals for diversification purposes as the equity rally becomes increasingly extended.

“At a time of escalating geopolitical risk in the Ukraine, Russia and the Middle East, with increasing volatility in equity markets and declining real yields investors are again looking to Gold’s defensive properties to offset potential declines in more cyclical assets.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at $1,311.80 a troy ounce, down 0.16%, after hitting an overnight session low of $1,308.00 and off a high of $1,319.00.
Silver for September delivery was down 0.28% at $20.953 a troy ounce. Copper futures for September delivery fell 0.05% at $3.197 a pound.

At $1312 levels charts signal neutral trends on a daily basis while on an intra-day strong selling is indicated.

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