Gold takes a breather after Thursday surge

Spot gold was trading at US$1,239, down US$7, a couple of hours into trading on Wall Street

Gold has risen US$85 per ounce this week

Gold took a breather after one its best days in years on Thursday.

A seeming perfect storm of a weak dollar, lower oil prices and plunging stock markets sent the spot price up by over US$50.

After hitting a twelve months high there some profit taking today as equity markets rallied and the sense of panic eased.

Some commentators expect gold to drift lower again if more normal market conditions return but others are redrawing their assumptions.

ABN Amro was bearish at the start of the year but said it was now reviewing its position.

“At the start of February, gold and silver prices took out their 200-day moving averages, a technical indicator.

“This is a strong signal of a change in trend. Indeed, we think that the unrest on financial markets will have a considerable impact on economic growth, central bank outlook and currency outlook.

“For gold and other precious metals this means an improvement in the overall price outlook.“

Spot gold was trading at US$1,239, down US$7, a couple of hours into trading on Wall Street, still a gain of some US$85 or more than 7% on the week.

Silver has also rallied and was trading at US$15.74 while platinum eased a few dollars to US$954.

Major share movers

Randgold Resources down 20p at 6,110p

Fresnillo down 12p at 887p

Anglo American up 17% at 369p

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