Gold approaches $900

Analysis

Gold jumped to its highest level in more than a week on Thursday on a US weak dollar and overnight gains in oil.

Gold rose to $891.80/892.70 an ounce from $890.75/891.95 late in New York on Wednesday, when it jumped nearly $7 on a falling dollar and as oil firmed after a strike threat by workers in Nigeria stoked supply concerns. It hit a high of $895.05 an ounce on Thursday, its strongest level since June 9, when it rose as high as $908.70. Gold was still well below a lifetime high of $1,030.80 hit in mid-March.

“I don’t expect prices to rally far,” said Mark Pervan, senior commodities analyst with ANZ. “If they are pushed through $900, you might see a bit more of some short covering. The oil markets are certainly starting to top out and the currency markets are certainly less favorable than they were, sort of, three months ago. If we break through $850, then you could see prices move down quickly towards $800.” 

The dollar fell on growing skepticism the Federal Reserve would raise interest rates aggressively. Oil fell 44cents to $136.24 a barrel after Nigeria’s oil ministry intervened to avert a potentially crippling strike at US energy giant Chevron.

Gold futures for August delivery GCQ8 on the COMEX division of the New York Mercantile Exchange added $2.00 an ounce to $895.5. Silver edged up to $17.34/17.41 an ounce from $17.33/17.43 late in New York. (Reuters)

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