Gold price climbs to $1,096
Monday, 29 March 2010
LONDON, MAR 28 (Agencies): The gold price climbed $6 to $1,096 as the price of gold was buoyed by a recovery in the euro currency against the US. dollar in overnight trading.
After displaying its resiliency yesterday in the face of a weaker euro, the gold price advanced on the back of the 0.7% rally in the euro to 1.3368 versus the dollar. With this morning's rise the gold price turned positive year-to-date and recovered almost half of its loss for the week.
The gold price also gained in spite of US. government bonds eyeing their largest weekly loss in 2010 after bidding at three Treasury auctions diminished and 10-year interest-rate swap spreads turned negative.
This morning's strength in the gold price and euro came amid further details surrounding a proposed bailout of Greece. European Union (EU) leaders backed a plan from France and Germany yesterday for a combination of loans from the EU and International Monetary Fund (IMF) for Greece, and asserted that the nation will most likely not need outside aid to reduce its mounting budget deficit.
However, actions speak louder than words, and given the frequent changing of events and conflicting reports on Greece that have surfaced in recent months, financial markets will have the final say on this matter when the country comes to market in April to raise approximately 10 billion euros ($13 billion) of bonds.
In overnight trading the euro rallied against most major currencies, while the yield on two-year Greek notes dropped 38 basis points to 4.46% as faith in the proposed bailout increased.
After displaying its resiliency yesterday in the face of a weaker euro, the gold price advanced on the back of the 0.7% rally in the euro to 1.3368 versus the dollar. With this morning's rise the gold price turned positive year-to-date and recovered almost half of its loss for the week.
The gold price also gained in spite of US. government bonds eyeing their largest weekly loss in 2010 after bidding at three Treasury auctions diminished and 10-year interest-rate swap spreads turned negative.
This morning's strength in the gold price and euro came amid further details surrounding a proposed bailout of Greece. European Union (EU) leaders backed a plan from France and Germany yesterday for a combination of loans from the EU and International Monetary Fund (IMF) for Greece, and asserted that the nation will most likely not need outside aid to reduce its mounting budget deficit.
However, actions speak louder than words, and given the frequent changing of events and conflicting reports on Greece that have surfaced in recent months, financial markets will have the final say on this matter when the country comes to market in April to raise approximately 10 billion euros ($13 billion) of bonds.
In overnight trading the euro rallied against most major currencies, while the yield on two-year Greek notes dropped 38 basis points to 4.46% as faith in the proposed bailout increased.