Gold " Targets $1226" as Greece Declared "Bankrupt" by German Press and 25% Bond Yields- 29th April 2010

Gold ticked lower on Thursday morning in London, drifting 0.6% from yesterday's 4-month high for Dollar investors as stock markets rose with the Euro on calls for a sudden resolution to the Greek government-debt crisis.Commodities rallied almost 1% on average as crude oil rose back above $84 per barrel.With volatility in the options market "starting to pick up and fresh [Dollar] highs for 2010 having been achieved," says one London dealer in a note, gold's "target on the charts is now $1226.""Resistance is seen now at 1193 which is the top of a 3-month bull channel off Feb.'s low at 1045," says the latest note from bullion-bank Scotia Mocatta's chart analysts.Gold's "unstoppable ascent" puts the "Fibonacci retracement at 1187.95 in sight," says Commerzbank's technical analyst Axel Rudolph in his Bullion Weekly.Easing back from its best London Gold Fix for Dollar investors since Dec. 4th this morning, the price of gold set a new record fix for UK buyers above £768 an ounce.The Gold Price in Euros slipped 1.4% from yesterday's new record high, trading 7% higher from the start of April at €28,300 per kilo."In the current situation, the impact [of a Greek default] on financial markets and other states would be incalculable," writes German central-bank president Axel Weber – a member of the European Central Bank's governing council – in today's Bild newspaper."Financial aid tied to tough conditions is for all parties concerned the best solution."Wednesday saw two-year Greek bond yields touch 25% as prices slumped yet again."Greece is not longer in the position to take up money at the financial markets and is thereby in fact bankruptcy," says an editorial in the Frankfurter Allgemeine Zeitung.Current discussions now center on Athens' funding needs being taken "entirely off market" by a 3-year package of perhaps €150 billion in Eurozone-government loans, according to press reports.Here in London meantime, and ahead of tonight's final 'Leaders' Debate' on TV before next Thursday's general election, governor of the Bank of England Mervyn King was quoted by a US economist, David Hale, as saying that "Whoever wins this election will be out of power for a whole generation because of how tough the fiscal austerity will have to be.""We are experiencing a moment of great uncertainty, characterized by a sideward trend" in Dollar Gold Prices, writes Filippo Finocchi from the trading desk at Italian bullion dealers Italpreziosi in Arezzo."We recommend extreme caution in taking positions because of high volatility and uncertainty.""Gold works well in inflation times, which is not the case at the moment," says Mario Spreafico, an investment manager at Schroder Italia, speaking to financial paper Il Sole 24 Ore in Milan."The Gold Price is already very high. It is an asset where money comes and goes for speculation only."Money supply in the 16-nation Eurozone shrank by 0.1% in the year-to-March, new data showed today, slowing the pace of deflation from Feb.'s 0.4% contraction.German unemployment fell this month from 8.0% to 7.8% of the working population.Although negative, Eurozone consumer and business sentiment both came in above analyst forecasts."We've been seeing large flows into gold because of concerns of sovereign risk and downgrades occurring in Europe and that is likely to continue," said David Moore at Commonwealth Bank of Australia to Reuters."People are looking to avoid risk."Euro Gold Prices have risen by 27.5% in the last year. They have almost tripled from the single currency's launch a decade ago.