Gold News

Gold bounces around $645

Gold did nothing of much in Asia on Friday, rising slightly at the London open to break $645 per ounce.

"Personally, I will gradually buy gold," said Yukuji Sonoda, a precious metals analyst at Daiichi Commodities in Tokyo. "I will close my short position and buy back a little bit now. The next target is $670 but this is a very difficult one."

Gold in Tokyo rose against a weakening Yen, and remains near 8-month highs versus the Japanese currency. By 09:40 GMT, it also sat just below £330 for Sterling buyers and a few cents beneath €500 per ounce versus the Euro.

Traders expect the Chinese New Year beginning in February to increase physical demand from Asian jewellers. But investment funds could remain cautious after this week's strong rallies failed to hold in New York overnight.

"Selling on rally is the short-term strategy, unless we break above $650 and stay above that for a few days," says Peter Tse, chief precious-metals trader at ScotiaMocatta.

"Investors are cautious about taking new positions," agrees Kazuhiko Saito, chief analyst at Interes Capital Management in Tokyo. "They want to watch whether gold prices can hold above $640."

Volatile action on the currency exchanges this week has left the Yen little changed against the US Dollar, while Sterling and the Euro have both slipped back.

Sterling is also retreating from its 29-month highs against the Euro. Wednesday's economic numbers in the UK – showing 0.8% growth in the fourth quarter of '06 despite production falling 0.2% while energy output fell 2.3% - have failed to push Sterling higher.

Could the UK currency, now the third most popular reserve money with central bankers, finally be about to hit the skids? For a full analysis, click here and read on...

Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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