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Gold continues to soar as fears build up

By:   Crown Forex
  • 22-08-2008
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With crude prices soaring, the dollar falling after investors were locking in on their profits, and more and more fears contineu to fill the heart's of investors, gold seems to be heading for its largest weekly gain in seven months as its appeal as a safer investment increased in the eye's of the investors.

Prices have jumped this week from the low of $781.55 per ounce to currently trade at the $835.60 per ounce as it faces a resistance on the $838.30 per ounce level. On the daily charts, momentum indicators show that the metal is being overbought and that a correction could be needed, yet on the weekly chart, the metal seems to still be oversold. With enough bullish momentum and background support from other factors, if gold was able to breach the mentioned level, it could possibly target the $849.00s per ounce level. Many believe that the shiny metal will remain within these levels as lower prices prompt buying while excessive gains will result in the fall of gold once again.

One of the major reasons behind the surge in gold prices is crude which was able to add $5.62 to the contract yesterday as the dollar continued to depreciate and the tensions with Russia were still escalating. Crude is also heading for the largest weekly gain in two months. The deal with Russia still isn't clear yet the agreement signed between the US and Poland to build a missile-defense system in the area has threatened oil supply to the West. The contract is currently trading above the $121.32 per barrel level today after hitting a high of $122.04 per barrel yesterday in the previous session.

More credit woes and fears concerning the US financial markets continue to build up as speculations now show that there is still threat of further losses from the credit crisis. The dollar recorded its largest one day drop in five months yesterday and has been trading near the lowest level in two weeks against the Euro. The housing sector in the US is still a problem and the manufacturing data yesterday released from the US alongside the leading indicators were worse than expectations still indicating that turbulence remains. Today, Fed Chairman Mr. Ben Bernanke is to give a speech on financial stability where investors have now placed bets that the Feds will not be able to hike rates anytime soon. The words that will come out of Mr. Bernanke's mouth will most likely be the market mover as the US today lacks fundamentals.

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Crown Forex
CROWN FOREX SA, located at St-Hubert 38, 2854 Bassecourt, P.o.box 247, Switzerland, is fully regulated as a financial intermediary under Swiss federal law on the prevention of money laundering (LBA, MLA). Our company is also affiliated with the ARIF association, thus overseen by the Swiss federal de

DISCLAIMER:

The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness.  I am not liable for any losses or damages, monetary or otherwise that result.  I recommend that anyone trading currencies, gold, silver &energies should do so with caution and consult with a broker before doing so.  Prior performance may not be indicative of future performance. Currencies, gold, silver &energies  presented should be considered speculative with a high degree of volatility and risk


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