Gold Prices Rise for Seventh Consecutive Day Amid Economic Uncertainty
Gold futures rose for a seventh consecutive day on August 5, 2010, as investors sought refuge assets due to weakness in other markets. The gold contract for December delivery settled at $1,199.30 an ounce, up $3.40 from the previous day. The rally in gold prices was attributed to the perceived safety of U.S. government debt and gold as a store of value during economic uncertainty.
Key Takeaways:
- Gold futures rose for a seventh consecutive day, with the most actively traded gold contract settling up $3.40, or 0.3%, at $1,199.30 an ounce.
- The increase in weekly U.S. claims for jobless benefits sent investors seeking safer assets, including gold and U.S. government debt.
- Analysts noted that gold's momentum was slowed due to prices advancing too high for bargain buyers and new investment demand not materializing to lift the market further.
- Frank Lesh, broker and analyst with FuturePath Trading, stated that investors are buying dips but also selling on rallies.
- Despite gold prices reaching a record high of $1,258.30 an ounce on June 18, analysts expect prices to reach $1,500 an ounce in 2011, driven by supply constraints and investor demand for safe havens.
Statistics:
- Gold futures rose 0.3% on August 5, 2010.
- The most actively traded gold contract settled at $1,199.30 an ounce.
- Gold prices broke above the $1,200 an ounce mark in intraday trading but couldn't hold those gains.
- Physically backed gold ETFs, such as those traded on exchanges like stocks or mutual funds, fell for six consecutive days prior to August 5, 2010.
Sources:
- Dow Jones Commodities News via Comtext, August 5, 2010
- Matt Day, Dow Jones Newswires, 212-416-4986, matthew.day2@dowjones.com
- Frank Lesh, broker and analyst with FuturePath Trading
- Suki Cooper, analyst with Barclays Capital
- Mark Bristow, chief executive of Randgold Resources Ltd. (GOLD)