Reuters Quote: Gold ends flat as rally pauses; $1,150/oz seen key
Gold ends flat as rally pauses;
$1,150/oz seen key
By Frank Tang
NEW YORK (Reuters) – Gold futures ended a hair lower on Thursday as the market took a breather after rising for the past five consecutive sessions, and the metal must break above key resistance at $1,150 to rise further, analysts said.
Bullion prices have climbed nearly 3 percent so far this week, largely defying a stronger dollar, as persistent fears over the fiscal health of smaller euro zone economies prompted investors to buy the metal as a haven from financial risk.
The price of gold has been largely moving in a trading range between $1,050 and $1,150 since it rallied to a record high above $1,220 in early December, failing to show a clear direction.
The fact that gold had a technical break-out on Wednesday while the dollar was also rallying “speaks volume” for the metal’s strong underlying demand, said Adam Sarhan, chief executive officer at New York-based Sarhan Capital.
Sarhan said that it will be key for gold to close above $1,150 an ounce for the week, as the metal has risen toward the mark several times but had failed each time.
“If it does rise above $1,150, that means we can confirm the break-out. If it doesn’t, we expect some sideways actions to continue.”
Meanwhile, euro-priced gold reached a record for a fourth straight day at 864.75 an ounce, as the euro continued to be pressured by Greece’s debt crisis.
Spot gold hit a near-three month peak of $1,153.65 an ounce and was at $1,150.15 an ounce at 3:18 p.m. EDT (1918 GMT), against $1,147 late in New York on Wednesday.
U.S. June gold futures settled 10 cents lower at $1,152.90 on the COMEX division of the NYMEX.
GOLD/DOLLAR INVERSE LINK WEAKENS
Bullion’s gains in the face of a stronger greenback indicate that the negative correlation between the metal and the dollar has lessened, analysts said.
“Currently we notice a clear de-coupling of the inverse correlation between the dollar and gold, and this seems to be on the back of the current chaos in euro zone,” said Pradeep Unni, senior analyst at Richcomm Global Services.
Gold extended gains after European Central Bank president Jean-Claude Trichet said euro zone economic recovery would be no better than moderate and uneven this year, speaking at a news conference after the ECB opted to keep interest rates on hold.
The euro recovered later in the session after Trichet said Greece was not in danger of defaulting on its debt.
Platinum prices firmed a touch but remained off the 20-month high they hit in the last session. Platinum was at $1,706.50 an ounce against $1,700.50.
Palladium eased to $501 against $506, well off the two-year high it hit on Wednesday. Silver was at $18.06 an ounce against $18.11.
(Additional reportin by Jan Harvey in London; Editing by Lisa Shumaker)
Full story: http://www.reuters.com/article/idUSTRE6361B120100408