Why Has Gold Risen For Best Part Of 3 Weeks?

January 18, 2012 | By | Reply More

Gold has risen for the best part of three weeks and is looking good to reach $1666 an oz., a strong resistance level, before the end of the week. Failure to breach this level is likely to hold gold back in bearish mode for a while longer.

An announcement that the IMF is seeking to increase its lending by $1trillion has been a factor in the recent up trend in the price of gold. The BRIC nations together with Japan have been asked to contribute to the IMF’s ability to up its lending capacity.

A warning from the World Bank that risk remains of a global financial crises as great as the Lehman Bros. fall out is still on the cards. It goes on to state that if the markets are unwilling to finance maturing debt and deficits of high income countries, i.e. Greece, Portugal, Spain, etc. a crisis that may bring down banks and financial institutions on both sides of the pond may occur.

In the meantime talks broke down between Euro zone governments and banks on agreements involving private sector losses.

A London based gold bullion dealer sees a reversal of the current positive risk situation that has bolstered the markets as the bullish news disappears and the larger bearish issues take centre stage. Although in the immediate future this is likely to strengthen the US dollar it should also sustain a movement by investors into gold.

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