Gold for February delivery added $7.40 to close at $1,620.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,626.80 and as low as $1,597.70 an ounce while the spot price was up $7, according to Kitco's gold index.
Gold prices shook off a lackluster stock market, a weaker euro and stronger dollar to fight its way higher. In morning trading, gold was weak, as a weak euro dragged on gold. Investors also took profits after gold mounted a three-day rally that pushed prices up 4.6%. But buyers stepped in once gold broke below $1,600 an ounce."Gold held $1,600 and the attention of the investor as inflationary and better payroll figures helped gold and silver decouple from copper and crude and the euro," says George Gero, senior vice president at RBC Capital Markets. "Gold investors see opportunities in any sell-off to become bargain hunters." Gold's recent connection to the "risk on trade," meaning that the metal has been rallying alongside stocks and the euro, can mean that gold as a safe haven isn't a sure thing. Jeffrey Wright, senior research analyst at Global Hunter Securities, thinks that if there were safe haven buyers in the market, gold would be soaring. Gold "needs an escalation for the safe haven phenomenon to kick in with either international potential conflict," referring to the West's political issues with Iran, a possible oil embargo and a power transition in North Korea. James Moore, research analyst at FastMarkets.com, sides with Gero, saying that "tensions between Iran and the West will continue to bolster gold, as safe-haven interest increases." Gero says that a close above $1,615 could trigger buy stops, where traders jump into gold at a predetermined price, which leads to a momentum rally. "Inflation may
-- Written by Alix Steel in New York.
>To contact the writer of this article, click here: Alix Steel.
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