The gold price climbed above $1,772 yesterday but promptly consolidated around $1,762, as the dollar gained strength and the eurozone continued to collapse.
The dollar’s climb was thanks to CB Consumer Confidence data coming in at a 7-month high, much higher than expected.
Eurozone woes continued as protests against Rajoy’s cuts became more violent than those seen previously. The Bank of Spain has also released a warning stating Q4 GDP will fall by a significant rate compared to that in Q3 2012. This morning, the overnight protests in Spain have sent jitters around the markets as investors begin to realise that a country with 25% unemployment is not one which can be rescued thanks to a quick bailout.
Analysts expect to see further disruption over in Greece where an austerity package, proposing the equivalent of 5% of GDP in cuts, is being finalised. A general strike is happening today, prompting mass gatherings in Athens. Meanwhile, Merkel and Lagarde are also due to meet to decide what to do about the ‘financing gap’ only just discovered in the EU-IMF sponsored programme.
The uncertainty and increasing instability in the Eurozone led to the euro falling to a two-week low against the US dollar.
Thanks to BrotherJohnF