Gold Prices Rise to Near 3-week High

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gold (commodities)

Gold prices neared a three-week high as the dollar softened against the euro because of the better than expected economic data from Germany.

Spot gold rose 0.6% at $1,193.60 per ounce after it reached the highest since October 30 at $1,204.70. Futures for US gold rose to high of close to three week at $1,204.10.

The metal has rebounded almost 6% from the low of four and a half years it had hit on November 7 at $1,131.85.

Reuters quoted Carlo Alberto de Casa, ActivTrades senior analyst as having said, “Gold is finding more strength after we broker the $1,180 resistance level from the fact that the dollar’s rally has stalled. $1,250 is going to be a very important resistance area.”

Against the basket of the major currencies, the dollar slipped 0.3% mainly due to the stronger euro after the ZEW survey indicated German economic sentiment had climbed in November for the first time in around a year, beating expectations and increasing hopes of improvement in the largest economy in Europe.

Earlier in the session, gold had dipped as the dollar was boosted by economic data that showed a rebound in factory activity in New York with the modest climb in US manufacturing output.

The Wall Street Journal quoted broker at RJO Futures, Bob Haberkorn as having said, “The mood in the gold market has improved somewhat. We can go lower still.”

India’s central bank is holding talks with the government to raise the curbs on imports of gold. More restrictions might hit India demand and could add pressure on prices of gold.

In China, the local prices were steady at the premium of $2-$3 per ounce to London levels with buying picking up in international prices.

Platinum climbed 0.5% to $1,203.50 per ounce and palladium climbed 0.6% to $772.10 per ounce. Silver rose 0.4% at $16.17 per ounce.

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To contact the reporter of the story: Jonathan Millet at john@forexminute.com