Forexpros – Gold prices rose Wednesday, as investors ditched the metal’s traditional hedge, the dollar, and set out in search for riskier assets, including stocks, currencies and precious metals.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,624.45 a troy ounce in early Asian trading Wednesday, up 0 42%.
Gold futures were likely to test technical support at USD1,603.79 a troy ounce, and resistance at USD1,628.79.
In Europe on Tuesday, the Spanish government sold EUR5.6 billion at a bond auction, above a target of EUR4.5 billion.
While the European Central Bank has said it won’t step in and buy government bonds directly to ease the financial crisis, it has made loans more available to banks, money that made its way to the auction earlier during the day.
Furthermore, German business sentiment numbers pleased markets, rising in December to 107.2 from 106.6 in November.
In the U.S., meanwhile, November housing starts came in at a better-than-expected 9.3% growth rate, fueling hopes that the economy is on more solid footing.
The data sparked demand for both stocks and commodities worldwide.
While gold traditionally moves inversely from the dollar, it often moves in line with the euro, which rose as the stream of positive news hit the wires.
The dollar was down against major currencies.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.18% at 80.08.
Elsewhere on the Comex, silver futures for March delivery were up 0.35% and trading at USD29.640 a troy ounce, while copper futures for March were down 0.33% at USD3.372 a pound.
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