Gold Bullion (GOLD)

[CaptWhizbang]

Market Nuggets: Nomura Sees Higher Chance Of Eurozone Stimulus; Buys Gold

Thursday May 17, 2012 9:14 AM

The likelihood of a quantitative easing in the eurozone has risen because of increased concerns regarding Greece, Nomura analysts say. If that occurs, it could cause the correlation between the euro-U.S. dollar spread to break, which would be positive for gold prices. Gold has become more sensitive to German real bond yields, supporting this view, they say. The bank adds earlier this week they bought gold on these two reasons. Although gold has mirrored risky assets lately, “this behavior has flipped historically when there have been major market shocks,” they say. The bank adds gold’s price rise during Asian hours is a positive sign, but admits it does not make a trend. “Also, we have begun to see improved technicals, such as the RSI starting to rise from very oversold territory, which has historically been … indicative of short-term lows,” they say.

By Debbie Carlson of Kitco News; [e-mail]
http://www.kitco.com/reports/kitcoNewsMarketNuggets20120517.html