Gold Climbs Above $1,110

The U.S. dollar's rally fizzled last night, which pushed gold up slightly to above US$1,110/oz. As I write this post, spot gold's hovering at $1,099.00. This Wall Street Journal report which ties the two together quotes some unnamed traders as saying, "the rise in commodities as a whole could be an end-of-year push amid holiday-thinned trade and that any renewed dollar strength at the start of 2010 could again cause some selling."

The attributed guess is still for a trading range:

The market will watch data out of the U.S. including weekly jobless claims and November durable goods orders later Thursday, said Afshin Nabavi, head of trading and physical sales at MKS Finance. He said the metal is likely to trade between support at $1,075/oz and resistance at $1,125 an ounce in the short term.

This particular range is slightly higher than the ones mentioned in the last few days. However, sentiment is still beaten down right now.

A more optimistic analyst is quoted in this Globe and Mail report:

“Gold's rising because of a weaker dollar,” said Daniel Smith, analyst at Standard Chartered. “But also the recent selloff was a bit overdone as a lot of the factors that supported gold are still in place,” he said....

“Investor flows have held up pretty well. Physical demand in places like India has been strong and I think that's going to be supportive of the prices,” Mr. Smith said, adding he expected a volatile trade due to holiday-thinned liquidity.

Also in the Globe is a tabulation of the twenty-seven worst performing stocks in the Toronto Stock Exchange / Standard & Poor's Composite Index of 300 stocks. Three of them are gold stocks: Agnico-Eagle, Kinross Gold and and Barrick Gold. Given gold's rise this year, the stocks don't seem to have done all that well. The financial crisis was to blame, of course.

Interestingly, there were several integrated oil, upstream oil-and-gas, and related-energy stocks on the list. Crude oil's also done quite well this past year - better than gold, actually.

So, it wasn't just gold stocks that were banged down stay-down hard by the financial crisis. Oil stocks have been too, and have been reluctant to rally even though the resource plummet is long over. Believe it or not, the oil-pipeline stocks have done better than the oil stocks is the past few months. Even the electric utilities have done better in recent weeks.