Gold prices jump more than 4%, snapping 3-day losing streak

Since Wednesday gold has fallen more than 10 percent, the longest such plunge since 1983, as investors sold the yellow metal and piled into dollar assets like U.S. Treasuries in a search for liquidity.

But Tuesday European leaders appeared to be making some progress on containing the fallout from a Greek default. Such a fund is seen by some as the last possible way to stop contagion from a Greek sovereign debt default.

The mood change about Europe emboldened investors to use the dollars and dollar assets they have been acquiring recently to buy stocks. That, in turn, knocked down the dollar 0.09 percent and boosted Asian and European stock exchanges as much as 4 percent Tuesday.

Investors were also emboldened to buy the heavily discounted precious metals. Gold was up at one point on the Comex 4.57 percent and silver — which has lost 24 percent of its value since last Wednesday — jumped 9 percent.

“Given that we haven’t had any correction for months, this has brought better value to the market for people who want to get back into gold,” Credit Agricole analyst Robin Bhar told Reuters. “I think gold’s bottomed out here.”

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Posted by VBN on Sep 28 2011. Filed under Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry