Wednesday, January 11, 2006

 

Gold Consolidates 'On A Very High Level'

Reuters looks at the day for precious metals. "Gold consolidated on Wednesday after touching a 25-year high earlier in the week, but analysts and traders said it was building steam for another charge higher. A rise in the dollar earlier had prompted some investors in Asia to drag down the metal."

"Spot gold was quoted at $544.20/545.00 an ounce by 1557 GMT, slightly up from $543.80/544.60 late in the U.S. market on Tuesday. It spiked to $550.75 on Monday, the highest since January 1981. Talk of China diversifying some of its dollar asset reserves was a major factor in driving gold higher earlier this week, although a senior central banker said media had wrongly interpreted a statement from the foreign exchange regulator."

"Physical demand for gold has also been affected due to such high price levels. 'We will be more comfortable with a positive view on the metal once physical demand has re-appeared again, although...we believe lower and more stable prices are required for physical buyers to re-emerge,' John Reade of UBS Bank said in a note."

"The dollar lost ground against the euro and steadied versus the yen, as the market waited data that could offer clues about U.S. economic growth and the monetary policy. Thursday's data is expected to show a narrowing of the U.S, trade deficit in November from a record shortfall the previous month. In other precious metals, platinum was mostly stagnant, dipping to $1,008/1,012 per ounce from $1,008/1,012. Palladium fell to $267/271 from $272/275. Silver eased to $8.90/8.93 an ounce from $8.94/8.97 late in the U.S. market."

Comments:
From a technical viewpoint, this is just what gold bulls want to see.
 
Gold just hit $554.7 Yippee!
 
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