Gold rebounds $1095 an ounce
Precious gold slightly rebounded on Friday, paring two days of decline as the U.S. dollar stopped its rally, increasing demand on gold as better investment. Spot gold rose to $1098.04 an ounce but it is facing pressure from strong resistance at $1095.00. The shiny metal recorded a low of $1097.64 and a high of $1098.56.
Yesterday, gold shed $18.20 or 1.64% to close at $1093.85 an ounce. Gold Price was setin London on Thursday at $1108.25 per ounce during the PM fixing inclining from $1104.00 at the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, remained unchanged at 1,111.92 metric tons on January 21.
The yellow metal dropped yesterday to its lowest in three weeks, after news on tightening monetary policy in China and Obama's plan to limit risk taking by financial institutions. Gold, reached its all-time high last year because of inflation risks may lose ground when world governments scale back stimulus, which is expected to take place in the second half of the current year.
On the other hand, the dollar's rebound is putting yet another downside pressure on gold prices. The green currency has twice chances to incline, as it reflects both the improvement in the U.S. economy and plays the role as a safe-haven, along with the yen. The dollar index, which tracks the dollar movements against six major currencies, fell today from five-month high to 78.12 from the day's opening at 78.43.
Obama's plan raised concerns and caused stocks to drop; where U.S. equities recorded its worst one-day decline since October and Asian shares followed its suit.
Inregards to other precious metals; platinum inched up to $1561.90 from $1561.40 a day before, while palladium slumped to $435.50 from $440.70.