Gold has hit it's highest point in almost a month. Speculative buying as oil neard record highs caused a frenzy of gold buying against the rising inflation fears sending gold prices to over $900 an ounce on Monday. Platinum followed gold's lead and flew to it's highest price in many months partially driven by speculation that a bullish supply and demand report would be released for 2008 also drove the prices up and strengthened buying.
Past attempts to reclaim gold's record high have seen heavy profit taking, which saw gold fall to a four-month low at $845 an ounce in early May.
"Whether gold will hold above $900 is a difficult question. Around about $920 should be the psychological resistance for the metal," said Walter De Wet, analyst at Standard Bank. "If the dollar can appreciate again to around $1.54 (against the euro), we should see gold becoming down again. Platinum of course remains very well supported from the physical side."
Oil extended last week's climb that saw prices jump to a record high near $128 a barrel, as concerns over tight fuel supplies overshadowed gains in the U.S. dollar.
In theory, rising crude oil lifts gold's appeal as a hedge against inflation.
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