Mumbai, Nov. 2
On the back of a weak dollar, resumption of investor buying has buoyed gold.
Weaker than expected readings in some economic data have reportedly pushed Euro/USD to a recent high of 1.2873 which has lifted investor sentiment in gold.
In the London market, on Wednesday, after falling briefly below $600 an ounce, the metal surged ahead, aided by a late rally in crude prices in addition to the currency factor.
Today, gold prices extended their gains to stay around $616/oz in the early trades in London. In contrast to recent trend, movements in gold appeared to be decoupled from oil for the time being, commented an expert.
It is likely that weak macroeconomic data have served to reinforce the current pessimism over the future outlook for economic growth which in turn may have befitted gold with its appeal as a safe haven asset, remarked another.
The technical picture also favours gold. A breakout above $607/oz keeps the bull trend in play, with the potential for further upside in the weeks ahead with $618 and $632 as the next areas to watch.
Interestingly, gold seasonality too suggests further gains into the year-end. Traditionally, the last two months of the year are strong for gold bulls.
To damage the uptrend, the market needs to decline back below the recent low of $592/oz, said a technical analyst.