Daily News

February 10, 2010 – After two strong days of gains, gold investment reached a positive stage as prices climbed above their resistance level. With gold’s close at $1,076.70 on Tuesday, prices passed the resistance level of $1,075 and renewed hopes by investors that the metal is finally beginning to mount the rally that many analysts have been predicting.

The consensus opinion is that the recent drops in prices have created some technical damage to the gold market that is currently being corrected, but the trend is promising. Franklin Sanders of The Moneychanger writes, “This (price increase) is good, yes, positive, but only steps along the right road and not reaching the goal, which is closing above $1,120.” He follows by saying that he is currently buying and believes that today’s prices “will look like a bargain a year from now.”

Private investors should also be analyzing the recent trend based on current economic events. The sovereign debt crisis in several European countries could be heading towards resolution as the EU negotiates certain bailout measures. This news could have both a short and long-term benefit for gold prices; good news for the euro generally sends the dollar down (as indicated by a 51.2 basis point drop yesterday in the US Dollar Index) and supports gold price increases. In the long-term, stability in European markets can encourage greater investment by the citizens, also helping to drive up prices of gold.

Traders should consider additional gold investment while the spot price remains near this resistance point. In advance of any potential gains, buying gold bullion or certified gold coins can be a way of looking to profit on any upcoming rises in gold price. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - Gold-Investment.info