Monday, February 1, 2010

Gold firms as dollar gives up early gains

Gold prices edged higher in Europe on Monday as the dollar gave up early gains to turn lower versus the euro, increasing interest in the precious metal as an alternative asset.

Interest from physical gold buyers after a 1.6 percent dip in prices in January also helped to underpin prices, analysts said, and from a technical point of view the metal appears to be bottoming out. "While most commodity markets have come under severe pressure over the past week, gold has held its ground impressively," said technical analysts at Barclays Capital. They said the metal was holding above its December low at $1,074 an ounce and 15-month trendline support at $1,069.

"With daily momentum oscillators in oversold territory, while daily sentiment has reached extremes not seen since September 2008 -- only 15 percent of DSI respondents are bullish gold -- we are on the lookout for signs of basing," they added.

Source: Economic Times