Thursday, April 23, 2009

Today in Gold: Thursday, April 23

Each weekday, Cash4Gold will troll through the web's gold banter and post some of the bigger or more interesting stories. Following is a run-down of today's features:

"US gold rises over $900/oz on fund, trade buying"
Author: Felix Salmon

Main Points: Gold had a big day today, rising $14.10 to finish at $906.60 an ounce. The price was as high as $910.40, the highest price since April 3.

The reason, at least the general reason, is expected. The dollar was weakened as stocks took a tumble, and investors turned towards gold as a safe haven. Gold, rather consistently, has an inverse relationship with the dollar and stocks.

Another contributing factor is that gold jewelry demand is up due to Akshaya Tritya, a gold jewelry festival in India.

Analysis: It's been largely a good week so far for the price of gold:

Monday: Up nearly $16
Tuesday: Down $4.80 (after being up early in the day)
Wednesday: Up $9.80
Thursday: Up $14.10

This is the longest sustain gold rally in some time. In recent weeks, there have been very few consecutive days of gold gains. Now that the $900 barrier has been breached, it will be interesting to see if this momentum will be sustained tomorrow. Recent history would suggest it will not. If it does, one could infer that there is no immediate cap.

Don't, however, forget about the impact of the festival in India. The jewelry industry can't rely on this every week.

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