Jessica Cross sighting...
ETFs behind gold price volatility - Jessica Cross, MD, Virtual Metals
In an interview on ClassicFM @ 18:00 on Monday, 5 February 2007
[miningmx.com] -- RECENT volatility in the gold price was owing to plans to launch gold-backed exchange traded funds (ETFs) in India, and rumours that the IMF was planning to sell gold.
Speaking on Classic Business, a week nightly radio programme, Cross said volatility would continue in the market.
“There’s been four Indian ETFs which has caused excitement. And then today, there’s been talk about a possible Japanese ETF which is particularly interesting,” said Cross.
Reports that the IMF was considering selling some 400 tonnes of gold reserves had resulted in significant uncertainty about the future direction of the bullion price. However, Cross said the gold price was still proving resilient given the opposing market forces that are currently at play.
“The gold price is holding up well given that base metal prices have come off so much since December,” she said. “I think it’s possible the funds are switching from base metals into precious metals," she said.
"So in a sense they’re almost shrugging off this news from the IMF which is interesting. The next few weeks will tell how the market begins to digest this news from the IMF,” Cross said.
Nevertheless Cross expects the gold price to remain volatile in the coming weeks.
“The IMF proposal still has to get Congressional approval, and bear in mind Congress is now largely Democrat rather than Republican which seems to indicate that the vote might go in favour of the proposal."
