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Gold price up on low dollar

26 January 2010 14:52 (UTC +04:00)

Baku -APA-Economics. Gold futures ended higher Monday, as easing concerns over Greek debt pressured the dollar while investors were lured by lower prices after the precious metal’s 4% slide over the prior three sessions, MarketWatch reported.
Gold for February delivery finished up $6, or 0.6%, at $1,095.70 an ounce on the New York Mercantile Exchange.
"Gold rallied from being oversold temporarily," metals analysts at Royal Bank of Canada said in a note.
Traders also took positions ahead of the expiration of the February contract on Tuesday, they said.
The contract ended last week with a loss, down 1.2% on Friday to finish at $1,089.70 on the Comex division of the New York Mercantile Exchange.
February gold had tallied a loss of 4.4% in the past three trading sessions to touch a one-month low of $1,081.90 on Friday.
On Monday, a weaker dollar gave a boost to gold.
The U.S. currency had strengthened last week, as nervousness in markets fed off concerns over Chinese growth, a proposal for tougher U.S. bank regulations, and questions surrounding the reappointment of Federal Reserve Chairman Ben Bernanke.
The dollar index, which measures the U.S. unit against a basket of six major currencies, fell to 78.207 from 78.288 on Friday. Reports that Greece’s debt sales met strong demand helped soothe worries over the country’s fiscal situation and reduced demand for the safe haven of the dollar, helping boost commodities.
However, concerns over China persisted somewhat. Analysts at Telvent DTN said they remained bearish over gold’s near-term prospects.
"Commodities as a whole could start to come under pressure," said Darin Newsom, a senior analyst at the firm. Technical signals show the CRB index and Dow Jones Industrial Average turning bearish and the U.S. dollar turning bullish, he said.
Newsom also said it’s "going to be tough pushing gold through [the] previous resistance-turned-turned-support [level] near $1,030 if [the] global economy comes into question again."
Concerns that China’s recently announced moves to curb lending will damp growth had reduced the precious metal’s appeal as a hedge against weak currencies and inflation.
As for the state of play this week, "we think there are still downside risks, particularly for gold, as we enter the seasonally weak period of the year," analysts at Credit Suisse wrote in a note to clients Monday.