Gold ticked lower in Asia today after hitting new 7-week highs against the Dollar and Sterling in yesterday's US trade.
It broke the key $645 level just as Tuesday's European session was drawing to a close. Versus the Euro, gold has now hit levels above €496 last seen in September. The Yen price of gold continues to look strong at 8-month highs.
Even so, gold analysts remain focused on the US Dollar. Gold may find support at $636 and $638 an ounce, according to Tobin Gorey of Commonwealth Bank of Australia, reports Reuters. Gains could be capped around $650 per ounce.
"I've had my doubts without the sort of other direction from oil or US dollar, it's going to get much to that," said Gorey.
Other professionals disagree. "The buying [on Tuesday] was reported as being predominantly from the funds who will no doubt be watching the market closely for further signs of a break-up above the technical chart resistance close to $648 an ounce," reckons Investec in Sydney.
Facing chart resistance or not, gold certainly faces severe threats to supply as 2007 begins. On Monday, Bolivian President Evo Morales sent a bill to his Congress asking to raise taxes on foreign mining firms.
Meantime, "this is technical selling," said Kishore Narne, head of research at Mumbai-based Anand Rathi Commodities to Bloomberg as gold ticked lower in Asia today.
"There is resistance at $647 level and I do not expect any fresh buying unless gold is able to break the $647 hurdle."
And longer-term? For the big picture of gold demand and supply in 2007, click here and read on – for free – now...