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Home Markets Markets Gold prices fall, is it time to make a trade?
Gold prices fall, is it time to make a trade? PDF Print E-mail
Written by Will Peters   
Thursday, 11 March 2010 11:08
But - traders are seeing new low levels as an entry point.



Gold prices continued to fall back over the course of yesterday.

"Despite the dollar easing, and increased inflationary reports coming out of China last night, gold still managed to tumble back.  CPI in China rose to 2.7% in February, and now markets will be factoring in how the Chinese are going to handle rising inflation," reports ODL Markets.

Tightening monetary policy, and even interest rate rises are now a factor to watch out for, and it will be interesting to note if gold once again assumes its mantle as hedge against inflation.

But, this morning gold prices steadied across Europe as the euro arrested its slide against the dollar, with bargain hunting and technical support helping the metal stabilise after the previous session's 1.2 percent fall.

Investor's are clearly seeing current levels as a Buy gold signal.

Spot gold XAU was bid at $1,107.90 an ounce at 1010 GMT, against $1,107.85 late in New York on Wednesday.

US gold futures for April delivery GCJ0 on the COMEX division of the New York Mercantile Exchange rose 10 cents to $1,108.20.

Prices have found good technical support at around $1,104 an ounce, and the metal has run into solid buying interest on the dips as investors take advantage of low prices to buy.

"Demand is certainly visible in the $1,101-1,105 range, and that is probably helping the metal for a immediate crash," said Pradeep Unni, senior analyst at Richcomm Global Services. "We hear there are lot of buy orders at levels below $1,100."

The euro EUR= steadied against the dollar, paring earlier losses. Expectations the economic recovery in Asia remains broadly on track after strong Chinese data supported appetite for currencies seen as higher risk, analysts said. [FRX/]

Persistent fears over sovereign debt issues in peripheral euro zone economies like Greece and Spain are keeping the single currency under pressure, however.

Usually the resulting upward pressure on the dollar would push gold lower, but those sovereign risk issues are also supporting demand for the metal as a safe store of value.
Last Updated ( Thursday, 11 March 2010 11:10 )