Tuesday, 7th June 2005 (3112 views)

Gold today traded near a three-week closing high, performing well against the dollar and the euro and increasing in appeal as an alternative investment to both currencies.

Gold for immediate delivery rose by 90 cents, or 0.2 per cent, to US $426.63 an ounce today, compared with $425.95 by close of trading yesterday - a figure which had also shown an increase of 0.8 per cent and the highest close since May 11th.

According to Bloomberg, Kamal Naqvi, a precious metals trader at Barclays Capital in London, stated that gold "appears to be benefiting from an investment flow, partly on falling confidence in the major currencies."

Some analysts have said that gold may be ending its tendency to move with the euro against the dollar, following a 57 per cent climb in dollar-denominated gold in the four years to May 31st, and a 46 per cent gain in the euro against the dollar.

"Gold may have finally decoupled from the euro,' David Thurtell, a commodity strategist at Commonwealth Bank of Australia, stated.

"The two have been tracking closely over the last four years because of the euro's role as the main U.S. dollar alternative currency.'

Gold for August delivery rose by ten cents to $428.50 an ounce in after-hours trading today on the Comex division of the New York Mercantile Exchange.

 

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