2007 Gold Price Will Depend On The Strength Of The Dollar

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According to Mineweb.com, periodic strength in the US dollar is expected to weigh on the gold price this year as the commodity normally maintains an inverse relationship with the dollar.

Periodic strength in the US dollar is expected to weigh on the gold price this year as the commodity normally maintains an inverse relationship with the dollar.

Helen Holten, head of commodity research at Standard Chartered Bank, says she expects the gold price to peak in the first quarter of 2007, before the US dollar displays renewed strength due to a turn in the US central bank (Fed) cycle.

Holten said the key question around the gold price this year was whether goldís investment value would be strong enough to withstand the dollarís periodic strength...

Consumers are progressively raising the acceptable price for gold, which seems to have settled around the US$ 580-590/ounce level for now. This level proved a floor to prices when investment demand eased in the third quarter of last year.

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