logo-loader

Gold retreats to $1,230 as recovery worries calm on Bernanke comments

Published: 00:30 10 Jun 2010 AEST

no_picture_pai

Gold inched lower to US$1,232/oz today, just a day after hitting record highs in US dollar terms at US$1,251/oz on as safe haven demand firmed amid increased worries over the European debt crisis and the strength of the economic recovery.

Fed Chairman Ben Bernanke helped calm the jitters yesterday when he said that the economy would not slip back into recession. The fears of a new wave of the crisis were prompted by the recent events in Europe, where Greece had to request a €110 billion rescue package from the EU and the International Monetary Fund (IMF) in order to avoid immediate insolvency, while the EU had to agree on a massive €750 billion bailout fund to prevent the debt crisis from spreading into other euro zone countries, notable Spain and Portugal. The two have recently been downgraded by high profile rating agencies, which have also cut Greece’s sovereign rating. Last month, the Bank of Spain had to bail out a small savings bank to prompt worries about the state of the European banking system.

Stock markets in Europe have been pressured by the situation in Hungary, whose government has said that the country’s debt problems are worse than previously thought and it could soon find itself in the same situation as Greece.

Markets rallied on Bernanke’s yesterday’s comments, pushing down safe haven demand and leading to slight declines in gold and silver, which slid to US$18.28/oz. Platinum performed better, rising to US$1,535/oz.

Major mining stocks were mixed. Randgold Resources (LON:RRS) shed 1.1%, while platinum miner Lonmin (LON:LMI) posted a small gain and silver producer Fresnillo (LON:FRES) rallied 4.5%.

Specialty chemicals fimr Johnson Matthey (LON:JMAT) declined 1.5%

Aquarius Platinum (LON:AQP) and gold producer Petropavlovsk (LON:POG) added less than 1%, while silver miner Hochschild Mining (LON:HOC) advanced 3.2%.

Turkey and Saudi Arabia operating gold explorer KEFI Minerals (LON:KEFI) and Lesotho operating diamond miner Kopane Diamond Developments (LON:KDD) led the small caps, surging 9%. Commodity asset development company Mercator Gold (LON:MCR) was in the red with a 10% loss. Uzbekistan focused gold miner Oxus Gold (LON:OXS) and Tajikistan operating gold miner Kryso Resources (LON:KYS) declined 6.5% and 5.5% respectively.

Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

11 hours, 2 minutes ago