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Gold ends week 1.3% higher, uptrend intact
Source: BI-ME , Author: BI-ME staff
Posted: Sat October 3, 2009 5:25 pm
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INTERNATIONAL. Spot gold had a choppy session on Friday, hovering in a very tight range near US$1000 in early trading before slumping to as low as US$987 per ounce after the United States reported 263,000 job losses in September and the worst unemployment rate, at 9.8%, since June 1983.

The price of physical gold however quickly rebounded as high as US$1007 as the dollar fell and closed at US$1002.30 or 0.4% higher for the day and up 1.3% for the week, maintaining its bullish momentum.

The yellow metal has traditionally shared a strong inverse relationship with the greenback, while also being a useful hedge against rising consumer prices.

Gold rose 2.42% in the last 30 days, by 8.7% in the quarter to the end of September and 20.11% year-on-year.

With gold's uptrend intact so far, a lot of analysts agree that dollar weakness and inflationary pressures will take the yellow metal to new highs.

"We remain bullish [on gold] while it holds above US$990 on a close," Scotia Mocatta's said in a technical note on Friday, adding "it has closed above here since September 2."

"We are positioning for fresh highs in the gold price," Deutsche Bank said in a note, adding its gold price forecast for 2010 had been revised up more than 30%."

"We expect this will be driven by a resumption in dollar weakness as well as an increase in inflation volatility, which has historically been beneficial to gold prices," the German bank said.

"At present we think the risks are mainly to the downside because of the long speculative positions [in Gold Futures] and potential for a greater Dollar bounce," London's Virtual Metals consultancy said in its latest Asian Metals Monthly for BNP Paribas and Fortis banks.

"But higher prices are likely before the year is out," it added.

Gold will remain popular while other investments continue to look shaky a senior economist at Nomura said.

"The gold market has already shifted its range, and I think the upper side of the range will be US$1,100 in the six months to come," Tatsufumi Okoshi told the Reuters this week.

"Stocks are already on the defensive, bonds are too expensive to buy and commodities other than gold have factored in most good news into their prices. So gold looks a better choice than other asset classes."

"The deterioration in the outlook for the US Dollar combined with an improvement in investor risk appetite is propelling gold prices higher," says HSBC's senior precious metals analyst James Steel.

"Gold appears poised to challenge its record highs," he added.

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

date:Posted: February 9, 2010
UAE. Location and quality are driving apartment prices; while average prices decreased, select communities, including Palm Jumeirah and Downtown Burj Dubai, experienced slight increases according to Landmark Advisory's latest quarterly report.
date:Posted: February 8, 2010
INTERNATIONAL. Trying to achieve financial goals by pouring all of one's assets into emerging markets today, telecommunications tomorrow, and Japanese small-cap stocks next week is not a guarantee for achieving a sound financial plan.
date:Posted: February 8, 2010
INTERNATIONAL. The latest survey shows 46% of respondents expect their business travel to increase, marking a rise by 22 points compared with figures of the same period in 2009.
UAE. Location and quality are driving apartment prices; while average prices decreased, select communities, including Palm Jumeirah and Downtown Burj Dubai, experienced slight increases according to Landmark Advisory's latest quarterly report.