Gold Futures Reach Highest Level in 1.5 Months on Technical Breakout and Buying Against Other Currencies

Strategic Insights -

Gold futures surged to a 1.5-month high as the metal followed crude oil higher and benefited from strong buying against other currencies. The gains were fueled by a technical breakout as gold rose through a key resistance level, prompting additional buying. At the peak, most-active April gold climbed to $1,134.60 an ounce, while most-active May silver reached $16.83.

Key Takeaways:

  • Gold futures hit their highest level in 1.5 months, reaching $1,134.60 an ounce on the Comex division of the New York Mercantile Exchange.
  • The metal extended its gains after rising through a key technical level that spurred additional buying, according to Afshin Nabavi, head of trading at MKS.
  • Gold remained underpinned by recent buying in the metal against other currencies, such as the euro.
  • The price of gold was influenced by the improved tone in the stock market and gains in other commodities, notably crude oil.
  • Crude oil rose early in the day, with April crude up $1.16 a barrel to $79.86, and peaked at $80.09.
  • Initial buying was linked to the improved tone in the stock market and gains in other commodities, but the market continued to rise as crude oil continued to climb.

Statistics:

  • Gold futures rose by $11.80, or 1.06%, to $1,129.60 an ounce on the Comex division of the New York Mercantile Exchange.
  • Most-active April gold climbed $13.30, or 1.19%, to $1,131.80, and peaked at $1,134.60.
  • Most-active May silver rose 36.1 cents, or 2.19%, to $16.83 per ounce.
  • April crude oil is up $1.16 a barrel to $79.86.
  • The technical level that spurred additional buying in gold was $1,131.50 an ounce, which was surpassed on February 22.

Sources:

  • Dow Jones Commodities News via Comtex, March 2, 2010
  • Comex division of the New York Mercantile Exchange, March 2, 2010
  • MKS, Afshin Nabavi, head of trading, March 2, 2010