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Thursday, November 15th, 2018 - Buy Gold - Bringing you trusted gold news and gold investing information since 2006

Gold Takes a Little Rest After a 3-weeks Rally

After rallying to its highest level in three weeks on Tuesday, spot gold on Wednesday (0310 GMT ) slipped down 85 cents to US$1,524.90 an ounce after rising as high as US$1,527.45 during the previous trading session – the strongest its been since May 4.

The euro inched down towards a two-month low among nagging concern about Europe’s debt crisis and the impact on other euro zone economies by a possible debt default by Greece. Some analysts argue that such a move by Greece would hurt peripheral euro zone economies and would push Ireland and Portugal into “junk territory”.

On Wednesday, euro-priced gold hit a record high of 1,085 euros an ounce and sterling-priced gold held on to a near lifetime-high reached on Tuesday.

A dealer in Singapore said: “With greater safe-haven flows into gold, there’s a chance that gold priced in euro as well in pounds will continue to rally. I guess for the dollar-denominated gold, when the dollar rises, then bullion will come under some pressure.”

A stronger dollar weighed up dollar-dominated gold, but the euro zone situation coupled with a rise in EFT holdings are believed to keep a floor under prices.

“Overall sentiment for the long-term is still bullish. But I think for the short-term, we’ll start to see resistance at $1,530 after rising from the downside of $1,470-$1,480 up to this level,” Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, said.

Wang Tao, a Reuters market analysts for commodities and energy technicals, also predict that spot gold may see an end to its current rebound at around US$1,536 per ounce, as it is expected to return to its May 5 low of US$1,462.40.

 


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