Gold & Euro Fall in Sync on “Risk Aversion”, Physical Dealing Hits Summer Lull

By Adrian Ash, GoldSeek

London Gold Market Report

SPOT GOLD PRICES reversed an early 0.8% bounce Tuesday lunchtime in London, drifting back to $936 an ounce as the Euro currency, commodities and world stock markets dipped on worse-than-expected US housing data.

Home-improvement giant Home Depot reported only a 7% drop in its second-quarter earnings. But new US housing starts and permits for July came in below both Wall Street forecasts and June’s figure.

Nationwide, according to analysis from First American CoreLogic, almost a third of US home-buyers now owe more on their mortgage than their house is worth.

“We saw risk-money withdrawn from the markets on Monday,” says Toshima Itsuo of the World Gold Council, writing for Mitsubishi Bank in Tokyo. “The foreign exchange market matched investors’ risk reduction in falling stock prices.”

Today the Euro fell back towards Monday’s two-week low of $1.4050, while government bond prices turned higher after an earlier slip, pushing 10-year US Treasury yields towards yesterday’s one-month low of 3.48%.

Crude oil stalled at $67.35 per barrel. Tuesday’s London Silver Fix came in almost $1 below last week’s two-month high of $15.07 per ounce.

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