Friday, April 13, 2012

Market Nuggets: HSBC: Gold Rises With Recovery In Risk Assets, Softer Dollar

Gold rose on a recovery in risk assets and a softer U.S. dollar, says HSBC. An Italian bond auction was described as well received and not presenting a near-term negative for the euro, the bank says. Further, the U.S. trade deficit for February narrowed, mostly due to increased exports, prompting a rally in risk assets and a shift out of U.S. bonds. “This supported EUR/USD, and in doing so, helped buoy gold and the other precious metals,” HSBC says. “Gold prices were further supported by a relaxation of eurozone funding stresses. One sign of reduced stress in the eurozone bank funding market was the slight narrowing of the EUR-USD 3-month currency basis swaps. This was supportive of the EUR and therefore positive for gold.” As of 4:19 p.m. EDT, Comex June gold was $17.30, or 1%, higher for the day at $1,677.70 an ounce. May silver was up 83.4 cents to $32.355.

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