Gold prices rose back above USD 1,100 an ounce in Europe on Monday as concern over sovereign debt fuelled buying of the precious metal as a haven from risk, with technical factors also supporting the market.
India gold demand remained slack for a third day on Wednesday as prices continued to rise, but a stronger rupee, which makes the dollar-quoted asset cheaper, aided sentiment, dealers said.
Gold may trade around current levels this week. Support for prices is building at $1,050 – $1,060, but gold remains vulnerable to short-term selling. A price decline toward $1,020 or even $1,000 should not be ruled out.
Gold Prices could rise beyond the $1,500 per ounce this year, according to one industry expert.
Jeffrey Nicholls, specialist precious metals analyst and managing director of American Precious Metals Advisors, believes that the long-term components of a sustained rise in global Gold Prices are in place.
By Jon Nadler
Yesterday’s Greek-flavored gold rally turned into today’s Chinese-tinged decline as the Beijing government flat-out demanded that banks freeze more money from being lent. The surprise but unsurprising move to raise reserve ratios by half a percent comes on the heels of a similar move on January 12 and will take effect on the 25th of the month.
Gold accelerated to a near one-week high at Rs. 16515 per 10gm as investors bought the metal as safe haven buying, largely shrugging off the impact of a strengthening dollar.
After crashing $100/oz from its peak of $1,212.50/oz on 2 December to a low of $1,105/oz on the PM fix of 18 December, the gold price began 2010 brightly. Gaining steadily, it fixed at $1,153/oz on 11 January before succumbing to a stronger dollar and heading back towards $1,100/oz.
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