<h3>Gold trades above $1500 while sliver reaches 31-year high</h3>
By IBT Staff Reporter On
Gold trades above $1500 while sliver reaches 31-year high
Before September 2010 no one could believe that the shiny metal could reach $1300 an ounce and before the beginning of this year many believed that gold is overpriced and it can never rise further, where $1500 level was considered an imaginary level.However, gold prices managed to trade above $1500 for the first time today as the factors that helped gold to rally recently are still having there effect which raise the question what is the gold's next level and when will it stop its bullish journey.Some technical analysts see that gold will face tough resistance at $1525, others see that it can continue rising till $1658, yet on the short term it may do some downside correction as it is currently trading in an overbought area, as depicted by the Stochastic Oscillator momentum indicator.Sliver also trailed the gold's rally as it rose to 31-year high and expected to track gold in the coming period.By stating the factors that helped gold to reach this record high, we can see that they are still having there impact on market.First, the rapid rise in inflation that forced many central banks all over the world to start tightening monetary policy to shore up inflation back to safe levels, where the high inflation levels were largely derived by the remarkable advance in oil prices on the back of the unrest in the Middle East and North Africa that toppled the Tunisian and Egyptian Presidents and their regimes and still spreading from one country to another.Second, the weakness in the dollar that if closed this month on decline will record its fifth monthly drop against a basket of major currencies. The dollar index, which tracks the dollar movements versus six major currencies, fell to a low of 74.67 compared with the day's opening level of 75.05. As long as the Fed is keeping interest rate low and continuing its second-round stimulus, the dollar is expected to remain week until the Fed make a change in monetary policy.Third, the debt concerns in Europe and the United States that were aggravated in this week and the week before when Moody's Investor Service lowered Ireland's credit rating to the lowest investment grade amid speculations that Portugal will get a bailout and Greece may not be able to avoid default., while Standard & Poor's downgraded US government debt rating to negative from stable. Fears that the high sovereign debt would shave growth prospects enhanced demand on gold as a safe haven and it seems that the problem is not far from over,Gold is currently trading at $1499.50 an ounce after recording all-time high of $1502.39 and a low of $1492.85, where oil also rose to touch a high of $109.36 a barrel relative to the day's starting level of $108.33.Among other precious metals, platinum inched down to $1783.50 from the day's opening of $1785.70, palladium surged to $743.20 from $739.00 and silver edged up to $44.35 from $44.21, as of 07:55 GMT.
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