How is gold performing in the face of the recently firm Dollar?
*Reuters, by Pratima Desai, December 20, 2007
“Gold Drops on Firmer Dollar, but Outlook Bright
Gold prices fell on Thursday as the dollar firmed, but analysts said investors seeking refuge from financial market turmoil should boost the precious metal over coming months.
Spot gold was at $795.10/795.80 a troy ounce at 8:57 a.m. EST, compared with $801.10/801.80 late in New York on Wednesday.
The precious metal touched a 28-year high of $845.40 an ounce in early November as investors, worried about the credit market freeze and financial instability, ran for cover.
‘Considering how much the dollar/euro has moved, gold is holding up reasonably well,’ said Stephen Briggs, economist at SG Corporate and Investment Banking.
‘Market conditions are thin and it could be volatile but we don’t have enough momentum to go out of the current range.’
The dollar rose to two-month highs against the euro and a basket of major currencies.
A stronger U.S. currency makes dollar-denominated metals more expensive for holder of other currencies.
‘The dollar is a bit stronger,’ said Philip Carlsson, global product manager at Saxo Bank. ‘Longer term gold is still within an uptrend, going towards $1,000. We haven’t seen the lower boundaries of the dollar yet and investors are nervous.'”
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