Tuesday, May 26, 2009

Today in Gold: Tuesday, May 26

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:

"Gold prices pull back on firmer dollar"
Author: Sara Lepro
Website: Google.com

Main Points: The dollar strengthened today while major stock indexes rose more than 2.3 percent. As a result of increased investor confidence, gold dropped $5.60 to finish the day at $953.30 an ounce. Gold had actually dropped as low as $936.30 during the session before a late rally.

In addition to being a reflection of a stronger dollar, another reason for the dip, according to Dave Meger of Alaron, could be profit taking after a long positive trend.

Analysis: This was gold's first drop since last Monday, when it fell $8.60. It has actually dropped on the first day of the week (yesterday was a holiday) for three consecutive weeks -- the only declines during that period (since May 11).

In other words, a bad start to the week is not necessarily a sign of things to come, at least according to recent history. In fact, it may be a positive sign. That said, gold is up $65.10 since the end of trading on May 1. Given that gain over a little more than three weeks, we may see more profit taking during the next few days.

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