The price of gold went up today thanks to investors’ fears about a Greek exit from the euro, and which also hurt European stock indices and the euro. However, the gold rise failed to maintain an earlier sharp gain as traders did not see more than a short-term opportunity today.
Gold is traditionally considered a safe haven investment that keeps its value when there are dangers in other markets. As Greece started its sudden “bank holiday” and images of long lines and closed ATMs surfaced all over the news, this has certainly been an appropriate time for gold to shine. The price initially rose to $1,186.91 this morning, but later flattered down.
Institutional investors’ interest in gold has shown some signs of improvement recently. U.S. Commodity Futures Trading Commission (CFTC) data revealed on Friday that hedge funds and money managers raised a bullish bet in COMEX gold futures and options in the week to June 23. If and when more severe measures are taken in Europe they might become even more bullish on gold.
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Total holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Shares (GLD), experienced their biggest rise since early February last week at 9.5 tonnes. The gold fund (also known as SPDR Gold Trust) recorded a small outflow on Friday, however, of 1.8 tonnes, and its total holdings remain flat since the start of the year.
Other precious metals reacted in mixed ways. Silver for September delivery increased 0.3% to $15.81 an ounce, down 4.8% this quarter, cutting this year’s gain to 1.3%. Platinum for October fell 0.7% to $1,080.70 an ounce, sliding 5.9% this quarter and 11% this year. Palladium for September fell 0.7% to $674.05 an ounce, a decline of 16% this year.