, IncFebruary 13, 2010 – After a tumble in the morning trading yesterday, gold prices finished the week strong on a Friday afternoon comeback. After a mid-morning drop below $1,080, gold was able to recover and bring prices back to $1,092.40, climbing to within twenty cents of their Thursday closing price of $1,092.60. This marked the end of a successful week which saw prices for the precious metal begin just above $1,065.00 and move back to mid-December price levels.
While investors have been wary due to the lack of a clear plan in Greece, many investors are making purchases on the basis of strong fundamentals. Gold is currently oversold as evidenced by the Relative Strength Index and recent trading patterns have suggested an increase in prices. Generally speaking, when investors see prices rising, their risk aversion drops and demand goes up.
Such was the case this week as the lack of a plan out of the EU, the continued drop in first-time US unemployment claims, and efforts by the Chinese government to dry up surplus funds in their economy failed to diminish demand for gold. Many analysts are suggesting that gold is positioned for another rally and a gold price increase in a week when the US dollar rose as well gives many people a great sense of optimism.
The week ahead looks favorable for gold prices as well. The Chinese New Year and the President’s Day holiday in the United States will bring traders back and firm details out of the European Union should lower risk aversion. Gold appears to be currently on an upward track, and investors should consider taking new positions in order to reap the benefits of its possible climb.
Ronald Stevens
Senior Staff Writer - GoldPrice.net
