Gold News

Gold bounces back from week-long lull

Gold last night finished on a high with the yellow metal for December delivery finishing on an upward surge of $4.60 to reach $737.40 per ounce.

Today (October 10th) there was further good news for those looking to buy gold, as the health of the futures market was boosted by a $7 climb to hit heights of $750.10 per ounce.

The upward trend for futures is a reversal of fortunes after a disappointing end to last week saw gold prices fall away slightly as the dust settled on its meteoric September rise.

Gold showed considerable resilience to keep its price buoyant despite a market rally elsewhere in response to the release of minutes from September's Federal Reserve policy meeting.

September's infamous meeting was the preliminary chamber for a decision to cut interest rates by 0.5 per cent, but markets were yesterday buoyed by confirmations that the council voted unanimously to cut rates in order to counter sub-prime worries.

This suggested to many that the same could happen again, a prospect which could mean greater liquidity and further inflation, leaving gold as a better investment proposition with a weaker dollar in sight.

Analysts at Action Economics told Marketwatch that the effect was already seen today and yesterday: "Bullion is higher on the back of renewed dollar weakening and a pickup in oil prices."

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