Holiday Cheer for Gold, Platinum and Copper

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What has to be encouraging for gold bulls though is that the dollar regained much lost ground against other major currencies during early to mid-December, yet apart from some initial weakness gold maintained its price levels very well and even moved up despite apparent short term dollar strength.

With gold, platinum and copper prices among others showing good signs of strength, although in light trade, the portents for the start of 2008 are already looking strong, although perhaps not too much should be made of this given how thin the market is at this time of year. But it does indicate a strength of sentiment which could well spring over into the New Year.

Today may be a bit more of a test of this feeling as most European markets will be open, although with many traders away from their desks until at least January 2nd activity is likely to continue muted - at least in volume terms.

But the fact that there is already post holiday strength in the markets would seem to augur well for those who would like to see prices rise - or at least maintain current levels...

The rise in the gold price price back to around the $820-825 level, has come earlier than many would have predicted given recent price performance, but events have conspired to put a positive spin back on the market. Turkish bombing of Kurdish villages in northern Iraq has brought fears of further destabilisation in the region, helping push the oil price up again - although not yet to $100 a barrel, but how long before this milestone is reached? - and in turn exacerbating dollar weakness against some key currencies like the Euro, with gold rising in its prime role as an indicator of dollar strength or weakness.

What has to be encouraging for gold bulls though is that the dollar regained much lost ground against other major currencies during early to mid-December, yet apart from some initial weakness gold maintained its price levels very well and even moved up despite apparent short term dollar strength. Any further signs of dollar weakness in early 2008 would likely see another gold price surge and perhaps the ‘magic' $850 level may be breached sooner rather than later.

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