Gold Prices Rise as Investors Look for Safe Investments

(CEP News) - Gold prices continue to move higher on Tuesday as fear grips financial markets.

The precious metal has broken through all resistance levels this morning as market participants run to ’safe haven’ investments. In recent sessions, gold prices have had trouble breaking above $950 an ounce. On Monday, Comex gold prices hit a high of $973.10. CBOT spot prices continue to hold massive gains, up $25.70 to $967.49.

Mike Glaser, futures broker at LaSalle Futures, said gold prices could find some resistance between $980 and $990. Despite some resistance, the outlook for gold remains bullish.

News from Moody’s is helping to spark the risk aversion sentiment. On Tuesday, Moody’s released a report warning that Western European banks face downgrades due to significant exposure to financial problems in Eastern Europe.

Glaser said the fear in Europe is driving gold higher. He pointed out that there was a high volume for gold in the European session. Gold prices in euros reached an all-time high, hitting €770.99 an ounce. Against the Canadian dollar, gold also hit an all-time high of C$1208.66.

“I think the safe haven play is still very much in effect,” he said. “I don’t really know why anyone would want to step in front of this trend.”

Commodity strategists from Barclays Capital are also expecting gold prices to continue to rally on the back of ’safe haven’ investments.

WTI crude oil is down $1.81 to $34.87, while ICE crude oil is trading down $1.97 to $41.31.

Meanwhile, ICE RBOB gasoline futures are down $1.03 to $119.60 and Globex natural gas is down $0.02 to $1.26. Heating oil at the ICE is down $5.43 to $120.90.

In the mining sector, spot gold is trading up $26.15 to $967.90 USD. In Canadian dollars, gold is up $53.76 to C$1224.05. Silver contracts at the CBOT are up $0.31 to $13.97.

Bloomberg’s index for base metals is down 2.15 points to 107.93. Wheat futures at the CBOT are down $16.25 to $532.00.

All Data taken at 10:44 a.m. EST

By Neils Christensen, neilsc@economicnews.ca, edited by Sarah Sussman, ssussman@economicnews.ca

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