Gold Heads for Fourth Weekly Gain
Source: Bloomberg, Kim Kyoungwha (9/11/09)
"Gold has risen 14% this year, while the Dollar Index, a six-currency gauge of the dollar's value, shed 5.6%."
Bullion traded near the highest since March 2008 as deficit spending by governments around the world erodes the value of paper currencies relative to gold and commodities. Gold has risen 14% this year, while the Dollar Index, a six-currency gauge of the dollar's value, shed 5.6%.
"Customers remain positive about the longer-term prospects for gold, but are concerned that following the recent run-up in gold that speculative positions are a little overblown," John Reade, a strategist with UBS AG, wrote in a note.
Gold for immediate delivery rose as much as 0.7% to $1,003.10 an ounce, before trading at $1,001.20 at 2:33 p.m. in Singapore. The metal, which touched $1,007.70 an ounce on Sept. 8, the highest this year, closed last week at $994.40.
Holdings in the SPDR Gold Trust, the biggest exchange traded fund backed by bullion, were unchanged for a third day at 1,077.63 metric tons yesterday, according to figures on the company's website.
To be sure, gold's rally to more than $1,000 an ounce may not be sustainable, said Karen Jones, a technical analyst at Commerzbank AG, citing the metal's relative strength index.
Gold's relative strength index was above 70, a level that some investors and analysts use as an indication that prices are poised to fall.
Among other precious metals for immediate delivery, silver jumped 1.1% to $16.8450 an ounce, platinum added 0.4% to $1,288.75 an ounce and palladium added 0.7% to $293.50 an ounce.