Are markets indicating further strength in gold prices?
*Bloomberg, by Claudia Carpenter, July 30, 2009
“Gold Advances in New York as Equities Gain, Weighing on Dollar
Gold rose in New York and London after two straight declines as rising equity markets signaled increased willingness to take on risk, weighing on the dollar.
The Dollar Index, a gauge of the currency’s value against six counterparts, fell as much as 0.6 percent after adding 1.3 percent in the prior two days, when gold dropped 2.5 percent. The dollar and gold tend to move inversely. The MSCI World Index of shares rose as much as 0.7 percent after two losses in a row.
Gains in equities are a sign of ‘falling risk aversion,’ which may reduce demand for the dollar, pushing gold higher, said Carsten Fritsch, a Commerzbank AG analyst in Frankfurt.
Gold futures for December delivery climbed 0.6 percent to $935.50 an ounce by 8:56 a.m. on the New York Mercantile Exchange’s Comex division. Bullion for immediate delivery rose 0.4 percent to $933.67 an ounce. The metal is heading for a weekly drop after two straight weeks of gains.
‘The dollar is likely to go lower, and thus gold higher today,’ David Thurtell, an analyst at Citigroup Inc. in London, said by e-mail.”
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