Gold Gains in New York as Halt in Dollar’s Rally Spurs Demand

Gold gained from a three month low in New York as a halt in the dollar’s rally increased demand for the metal as an alternative investment. The U.S. Dollar Index, a six currency gauge of the greenback’s strength, fell after last week climbing to the highest level in almost seven months. Gold futures, which usually move inversely to the dollar, slid to a three month low of $1,044.50 an ounce on Feb. 5.

“The dollar is down,” said Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany. The metal’s sudden drop last week is also “a good indicator that prices may rise,” he said. Gold futures for April delivery rose $13.70, or 1.3 percent, to $1,066.50 an ounce on the New York Mercantile Exchange’s Comex unit at 8:26 a.m. local time. Prices declined 2.9 percent last week, a fourth consecutive drop. Gold for immediate delivery in London was little changed at $1,066.72.

The metal climbed to $1,070 an ounce in the morning “fixing” in London, used by some mining companies to sell production, from $1,058 at the afternoon fixing on Feb. 5.
Gold futures’ relative strength index, a gauge of whether a commodity or security is overbought or oversold, plunged to 40.55 from 50.08 on Feb. 3. “From a technical perspective, gold was heavily oversold,” Fertig said.....Read the entire article.

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