Gold Price Still Flying High


"Gold prices are up 3.6% in September."

Gold prices hit new heights early Wednesday, reaching above $1,290 an ounce on Globex during trading in Asia following a U.S. Federal Reserve statement that it was prepared for more action to head off deflation and boost the economy.

Globex futures prices for the Comex GCZ0 Dec. 10 contract reached as high as $1,296.50 an ounce and were last quoted at $1,293.7. That was up almost $20 from the previous settlement. Bullion had been at $1,273 an ounce on Globex before the Fed announcement in Washington and during the regular trading session in New York on Tuesday December gold had fallen $6.50, or 0.5%, to close at $1,274 an ounce.

Gold ETF holdings also reached a new record of almost 67.2 million troy ounces. Analysts with DailyFX noted that gold prices, which are up 3.6% in September, were outpacing the rise in holdings, which were up only 0.39% since the beginning of the month.

Silver was up as much as $0.50 in early morning Globex futures trading, with the Comex SIZ0 Dec. 10 contract reaching as high as $21.17 and was last at $21.08. The metal added $0.24, or 1.18%, on Tuesday and the gold/silver ratio fell slightly to 61.6, which shows that silver continues to outperform gold.

DailyFX analysts said prices continue to test resistance at the $21.00 figure, with negative Relative Strength Index divergence hinting that a pullback is ahead. A break past initial support at the $2050 bottom of a minor rising channel would expose a horizontal barrier at $20.19, they said.

Gold Spot $/oz. (9/21/10)

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