Gold recovers from previous losses

Source: Energy Digital

Date :18/04/2008 12:23:48

Gold’s profits rose on Friday, recovering from some of its losses from the previous day, with traders hoping that it would try for the $950 level once again.

Some people in the market expect gold to break away from its existing range-bound trade and move on to higher things.

Tatsuo Kageyama, an analyst at Tokyo's Kanetsu Asset Management said: "The elements supporting higher gold are there.”

"Even though it was brief, gold did break above $950, with crude prices hitting record highs and the dollar continuing to remain weak against the euro," he added.

Tracking oil

On Thursday, spot gold rose to a three-week high of $952.60 an ounce before giving up gains on profit-taking due to the dollar’s slight recovery.

Bullion rose to $945 per ounce on Friday. Crude oil prices decreased from its historical height of $115.54 a barrel on Thursday. Prices are said to continue to stay around the $115 mark because of worries about supplies of gasoline in the America ahead of the summer driving period.

The U.S light crude oil delivery for May increased 27 cents to $115.13 a barrel. Gold often tracks oil because of the investors using it as a cost evade when energy prices are high.

Catching up

"Gold is still looking cheap relative to crude and needs to do some catching up," said Kageyama at Kanetsu.

Bullion is down-trading by 8.5 percent on average from its all time high of $1,030.80 which was achieved March 17.

On Friday, the dollar steadied against the yen and the euro in the currency market, holding onto profits made on the previous day. This was thought to be due to investors growing more confident about the overall financial sector for the troubled U.S.

April 18 2008