Volatile Gold Up and Down With the Dollar

Source: Mineweb.comáá(10/6/07)

...after hitting a 2-week low, it bounced back $18 on signs of renewed dollar weakness. On Friday it consolidated back up to the low $740s, after a shortlived blip back below $730, and stayed above the $740 level until the markets closed.


The gold price has given investors and speculators an interesting ride over the past week, moving down on any indication of dollar strength and back up on dollar weakness.

At the beginning of the week, the yellow metal moved down sharply on a small boost in dollar value and by Thursday had fallen below what many had considered to be a key resistance level of $725 or $726. Some were thus expecting a further decline down to the low $700s, but gold invariably confounds in the short term - even though long term expectations have been fairly well met in recent months since the $608 low at the beginning of the year. So on Thursday, after hitting a 2 week low, it bounced back $18 on signs of renewed dollar weakness. On Friday it consolidated back up to the low $740s, after a shortlived blip back below $730, and stayed above the $740 level until the markets closed. It will be watched with interest next week.

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