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Gold is a highly sought-after precious metal which, for many centuries, has been used as money, a store of value and in jewelry. The metal occurs as nuggets or grains in rocks, underground "veins" and in alluvial deposits. Modern industrial uses include dentistry and electronics, where gold has traditionally found use because of its good resistance to oxidative corrosion.
Gold Consolidating Below $1,000, Investors Hope for a Return to Last Weeks Highs
Gold futures continue to be subdued by this week’s early Dollar rebound, the Dollar Index has continued to add to yesterday’s gains, largely due to the dollar strengthening over the Euro. However with the dollar index currently holding 77.08, it still represents a substantially weaker dollar than this time last year.
Despite last weeks record weekly ‘net long’ positions of over 29 million ounces, the gold price is receiving support just below the $1,000 mark.
Prices have maintained the majority of last week’s gains, some analysts and investors are hoping that this week’s initial activity merely represents a consolidating pause before an attempt to build on last weeks rally.
Blue chip Randgold Resources (LSE: RRS, NYSE: GOLD) started the day with small losses, as did fellow yellow metal producer from the FTSE 250 Peter Hambro Mining (LSE: POG).
Chinese focused gold developer Central China Goldfields (AIM: GGG) and Turkey and Ethiopia focused gold explorer Stratex International (AIM: STI) led the way, rallying 38% and 20% respectively.
Kazakhstan operating gold miner Frontier Mining (AIM: FML) followed with an 8% surge, while Solomon Islands focused gold and copper prospector Solomon Gold (AIM: SOLG), South Africa operating gold producer Pan African Resources (AIM: PAF) and South American focused Mariana Resources (AIM: MARL) all climbed about 4%. Chaarat Gold (AIM: CHG), which is focused on developing a multi-million ounce gold project in the FSU, rose 5%.
