Gold futures went over the $800 an ounce mark for the first time since October 16, closing the session at $791.80 an ounce on the Comex division of the NYMEX. It went as high as $801.90 before settling to the closing numbers.
For the week, gold futures were up by 6.7 percent, the best performance since the week ending September 19. In dollars that was a $43.10 increase.
Investors are starting to ask themselves if this is the beginning of gold performing in its usual role as a haven of safety. The ongoing plunge in oil prices, decoupling from the movement of gold for the first time in a long time, may also signal a return to normal activity for the yellow metal.
Forced liquidation has been a major factor in holding the metal back from its usual upward movement in times like these.
Other factors have been prices falling and a stronger U.S. dollar, which has also put downward pressure on gold.
But the U.S. dollar strength is partly the result of some governments selling gold to prop up the dollar, as well as the forced liquidation coming from funds needing access to cash.
It doesn't seem that even with the beginning of the decoupling of gold from oil, that it means the forced liquidation period is over. I don't think we've reached that point yet. It is possible it may be the beginning of the end though, and that would definitely be a positive signal for gold investors.
No comments:
Post a Comment