Gold Lifts as the Dollar Slides

Although a string of four data points is hardly conclusive, sustained increases in the WLI could point to a stronger economy in 2007, which may reverse the dollar's decline.

Back in the futures trading pits, at least one observer seems concerned that the dollar-driven surge in bullion hasn't induced some of gold's traditional buyers to participate.

The climb "was almost entirely dollar-induced," writes Jon Nadler, an analyst at Montreal-based bullion dealer, Kitco. "We still wish we had seen added bullishness on the part of jewelry buyers and private investors as a component of this rally."

On the technical analysis side, Pasedena Calif.-based MarketVane says the Bullish Consensus for gold rose to 69% bullish from 66% earlier in the week. That's a hair below overbought territory, which starts at 70%.

"It's not extremely overbought and with the uptrend being somewhat stable that's positive for the longer term," says Rich Ishida, president of MarketVane. He adds that the pattern of higher highs and higher lows is positive for a continued upward trend.

Ishida says the next resistance level is at $675, and says the price could hit $700 by year-end.

Among the miners, Freeport McMoRan Copper & Gold(FCX Quote) received a nod from technical analyst John Roque at Natexis Bleichroeder in New York. He's targeting a $97 a share, vs. the current price of about $61.