Gold inclines above $1105 an ounce
Precious-Gold rose in the first day of trading in 2010 ahead of the release of important data in the U.S. and Europe. Prices spiked in 2009 to their highest level on record by $1225.26 an ounce, due to fears of recession and inflation.
The looming downturn that hit global economies enhanced demand on gold as a safe-haven. Also, the trillions spent to reviving economies helped gold prices to rise more as an inflation hedge. This year, although fears declined with the remarkable improvement witnessed since the second half of 2009, inflation is expected to rise where the rate is still below the lower boundary set by central banks and the stimulus plans are not withdrawn yet.
On December 31, gold advanced $4.30 or 0.39% to close at $1095.05 an ounce. Gold Price were setin London on Thursday at $1104.00 per ounce during the AM fixing.
Gold jumped 24% in 2009, but fell near 7% in December as the dollar strengthened; thereby reducing the appeal of the metal as an alternative investment. Currently, the dollar index is at 77.80 declining from the day's high at 78.18, ahead of the release of ISM manufacturing in the U.S. and other manufacturing data in the euro zone and U.K.
Hence, gold prices benefited from the dollar's slid and oil's rise to $80.60 a barrel close to 10-month high. Oil rebounded from a low of $70.15 recorded on December 9th above $80 on signs of recovery, especially from the U.S. which is predicted to expand 2.5% in 2010.
Meanwhile, gold is traded at $1109.45 recording a high $1110.95 and a low of $1093.20.