Investors take advantage of low gold prices
Gold traded higher by the start of this week, extending the gains it acquired Friday. Silver and other metals also increased on weak dollar that ended a two day gain on the US dollar index and depreciated.
The US dollar index; which tracks the performance of the dollar against the pound, the yen, the euro and other three major currencies fell to trade at 80.33, compared with the opening levels of 80.48, while setting a high of 80.51 and a low of 80.33.
On a daily scale, gold for immediate delivery rose to trade at 1,385.10 an ounce, compared with the opening levels of 1,376.35 an ounce. Gold set a high of 1,388.04 and a low of 1,376.35.
Due to the inverse relationship between the metal and the greenback, gold gained nearly 26 percent this year. Gold futures rose by 0.45 percent or $6.20 to trade at 1,385.400 an ounce.
Major Market Movers
Moody's Investors Services downgraded Ireland's credit rating Friday by five levels taking the country's credit rating to Baa1 from Aa2, along with placing the outlook for the country to Negative. Moody's downgrade comes as speculations hinted that the Irish government would suffer to overhaul the banking sector.
The Euro rose against the dollar after the release of the news, allowing the dollar to depreciate and for commodities to benefit.
Silver sales are forecasted to rise in the upcoming period, as investors seek protection from inflation and wealth from the volatility they face in FX-exchange markets.
Silver for immediate delivery rose on the daily scale to trade at 29.32 an ounce, touching a high of 29.43 an ounce and a low of 29.13, compared with the opening levels of 29.13.
Platinum for immediate delivery rose by $13.0 to trade at $1,705.00 an ounce, Palladium rose by $7.0 to trade at $741.00 an ounce.
Technical Analysis for Gold
The metal was trapped within a tight range trending downwards during the previous week since the liquid has started to be very low, due to the annual vacations ahead of end of 2010. Classically speaking, gold is presently moving above the support line as seen on the secondary image, whilst a gap was formed. Thus, we look at this price action as a retesting process before resumingthe potential downside movements expected during this week.