Gold Prices Recover from Selloff
Source: The Street, Alix Steel (11/15/10)
"Gold prices were regaining their footing Monday after losing 3% Friday."
Gold for December delivery was up $7.20 to $1,372.70 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Monday has traded as high as $1,375.50 and as low as $1,356.50.
The U.S. dollar index was rallying 0.47% to $78.45 on the back of a weaker euro, which was falling to $1.36 vs. the dollar. The spot gold price Monday was up $4.60, according to Kitco's gold index.
Gold investors were trying to recover after Friday's deep selloff which pushed prices through multiple support areas to settle below $1,370 an ounce. Better-than-expected October retail sales as well as a slew of merger news Monday were initially keeping gold prices down as investors opted for stocks, but weaker-than-expected New York manufacturing data and bargain hunters helped gold prices inch higher.
In the medium term, global uncertainty, currency instability, debate over quantitative easing round II, a possible Ireland default and eurozone contagion all promise to leave the gold market vulnerable.
"Volatility looks set to remain a feature in the coming sessions," says James Moore, analyst at thebulliondesk.com.
The dollar has been curbing its expected decline from the Federal Reserve's loose monetary policy due to a falling euro. The euro has been hit over the past week on some of the EU members' inability to raise money. Investors had been dumping bonds from Ireland, Portugal and Spain on worries that they would be on the hook if the country needed bailout money or defaulted.