Monday, June 16, 2014

Gold is firm

Gold is firm as we start the new trading week. The spot price stands at $1280.21 per ounce in Monday’s European session. The precious metal had a strong week, gaining about 2.9% against the US dollar, as fighting continues between insurgents and government forces in Iraq. On the release front, today’s highlight is Empire State Manufacturing Index. The markets are expecting another strong reading. On Friday, US key numbers were weak, as PPI and UoM Consumer Sentiment both softened in May.
In Iraq, militants linked to al-Qaeda continue to progress towards the capital of Baghdad after capturing key cities on the weekend. The insurgents have seized control of the northern oil city of Kirkuk, which could hamper oil production and exports from Iraq.  Gold prices have reached three-week highs, as concerned investors continue to snap up gold, which is considered a hedge during periods of geopolitical instability.