Price of gold was fueled by a decline in the U.S. dollar against a basket of foreign currencies

The gold price climbed $16.51, or 1.0%, to $1,678.76 per ounce Wednesday afternoon amid a broad-based rally on Wall Street. Strength in the price of gold was fueled by a decline in the U.S. dollar against a basket of foreign currencies. The SPDR Gold Trust (GLD), a proxy for the gold price, rose $1.43, or 0.9%, to $163.53 per share.

Commenting on the gold price, RBC Capital Markets senior vice president George Gero wrote in a note to clients that “We believed a higher trading range [was] imminent after $1,675 as better momentum, higher volume, higher moving averages and higher open interest came into play.”

In recent weeks the correlation between gold and other asset classes – particularly the U.S. dollar and euro currency – have noticeably changed.

While the gold rallied alongside the dollar as a safe haven for the majority of the summer, over the past month it has traded more in line with the euro currency as a riskier commodity.

Analysts at UBS elaborated on these developments in a note to clients on Wednesday.

“Gold has stepped into new territory, acting like a hybrid of a risk asset and a safe haven, as it tries to find a balance between the two opposing forces,” the firm wrote. ”This has made trading the gold very challenging, as while one can have a view on an event such as U.S. payrolls for example, deciphering how gold reacts has become a lot more difficult.”

UBS added that ”While buyers are nimbly returning, it is no surprise that there is caution given the struggle for conviction.”


Related Posts Plugin for WordPress, Blogger...

KLSE Info Zone

About This Blog

Malaysia Gold Investment

I found Gold Investment in Malaysia is a vary good tools to make profit when the market is down. I also found that Gold Price go up and down more slower compare to share market so to make money in long term, Gold is the right tools. This blog is all about Malaysia Gold Info and the way to make profi

Blog Malaysia


  © Free Blogger Templates 'Greenery' by Ourblogtemplates.com 2008

Back to TOP