Gold Rising Yet Again

The current rise is tepid compared to yesterday's run-up, but gold's still gaining. As I write this post, spot gold's at US$1,121.60.

Yesterday's jump was only partially caused by a U.S. dollar drop, and today's more modest rise took place despite a partial immediate-term recovery in the greenback. A Wall Street Journal Online article attributes yesterday's and today's gains to these factors: "The dollar's weak start to the year, fresh fund buying and a pickup in physical demand are driving gold's recovery since it fell to a one-and-a-half month low on Dec. 22, analysts said." It does, however, contain a cautionary quote to the effect that recovery is bound to benefit the greenback, which should push gold back down.

Another report, from Bloomberg, quotes an analyst who takes a contrary view about recovery: "Rising optimism that global economic growth will gain more momentum in 2010 is pushing up stock and commodity markets, reviving demand for alternative investments at the expense of the dollar. Gold will be the “place to be” for investments in 2010, Peter McGuire, managing director at CWA Global Markets Pty in Sydney, said in an interview today."