Greek PSI brings heart to gold prices

Due to market concerns about whether the private sector participation (PSI) program in Greece can obtain sufficient participation rate and worries about the euro zone economy, the euro/US dollar was under pressure and the price of gold fell sharply during the European time yesterday (March 6). $1,680/oz nearby.

The price of gold has not recently benefited from its safe-haven attributes because investors believe that the safe-haven property of the US dollar is stronger than the price of gold.

The price of gold this year is mainly driven by the exchange rate mechanism, and the stronger US dollar is not conducive to the price of gold.

At some point, if confidence in the euro zone is hit hard by the market, you will think that it is good for gold prices, but at the same time, you should also pay attention to the negative correlation between the dollar and gold prices.

Following last week's cumulative drop in gold prices by nearly 4%, gold prices further expanded this week.

If the gold price fails to rebound above the important support of $1,690, it may fall further to the $1,649 to $1,656 area.

In the short term, the market may take some time to consolidate. Before the price of gold rises significantly, another round of decline may occur.

The monthly rate of Hong Kong's inflows to mainland China in January plummeted by 15%, reflecting the weak sales of gold during the Chinese Lunar New Year holiday. Hong Kong’s gold exports to mainland China in 2011 were three times higher than in 2010, indicating a solid demand for gold investment in the Chinese market.

Due to the lower price of gold and the weakening of the Indian rupee, the demand for physical gold in the Indian market is firm.

The gold/silver price ratio was re-examined to 50.7 yesterday. Last week, the silver price was far higher than the gold price. This rate once fell to 48.4, the 5-month low.

At 09:38 Beijing time, today's gold price reported 1677.51 US dollars per ounce.