, IncFebruary 16, 2010 – On the strength of increases both yesterday and today, gold prices have broken through the $1,100 barrier with risk aversion rising against a number of foreign currencies. Gold has set its all-time high against the euro and is close to breaking its record against the British pound as the metal comes strong off two months of corrections to post gains in each of the last two weeks. Gold prices at midday Tuesday in US stand at $1,118.70, up $18.20 on the morning trading.
Although gold investment has recently been soft in the US as the dollar experienced its rally, investors in countries with currency issues have increased their gold exposure as a hedge against inflationary pressures. While there has been a short-term rally in the dollar, long-term gold fundamentals continue to strengthen as sovereign debt problems in the US and other countries erode investors’ confidence in currency-based assets.
Recent analysts’ reports indicate a growing sense that gold prices are preparing for another rally. Citigroup Inc released a report suggesting that after clearing the $1,100 price point, gold had broken through its resistance and would likely move towards $1,160 per ounce in the near future. As the dollar settles down from its recent climb, many expect gold to be the next to rally.
With gold prices breaking through an important resistance point, many experts see this as a promising time to purchase gold. Rising prices signal potential profits and with some analysts predicting spot prices of $1,350 to $1,500 per ounce this year, profits could be very lucrative for investors who get in before prices increase.
Ronald Stevens
Senior Staff Writer - GoldPrice.net
