Run up in gold price ahead of Easter holiday
The gold price has recovered from its recent dip with a boost which has taken it back over the $1,120 resistance level - and still heading upwards at the time of writing. Some poorer than expected U.S. labour figures may have been an initial trigger - but in reality the price was already moving up ahead of these. The dollar wasn’t moving downwards either, so it looks to have been general investment demand responsible for the increase. Certainly reports suggest continuing strength in gold ETF inflows and there are signs Eastern markets, notably India, may be beginning to accept that plus $1,000 gold is here to stay.The other main precious metals - silver, platinum and palladium were all also seeing healthy increases. Silver in particular tends to move in line with the gold price, but with more volatility and gains in percentage terms over the past few days have been a lot stronger than for gold. But then on recent dips percentage losses for silver have also been greater than those for gold.Silver and gold though are still well off their high points, and certainly, if momentum starts building up again we could see some useful increases. Indeed some commentators feel that if gold can hold above $1,120, then it may be poised for a run up to challenge the peak price reached last year. Citigroup’s technical analysts, for example, reckon that the charts suggest that this leg in a continuing gold bull market will take the price up to above $1,300 - and eventually to $2,000 and above. The initial break-out target is seen as $1,135-$1,145 and if these levels are breached then there could be a rapid move up to test the $1,226 level seen last December.With European markets already closed and the U.S. trade thin ahead of Easter not much further will happen until next week, but there other bullish factors for gold around. There does seem to be strong resistance to falls much below $1,100 and there is a lot of market talk about the general stock market being vulnerable to another major downturn - the fabled double dip! This will probably be having the effect of flows into gold as a wealth protector.Gold certainly seems to have been consolidating nicely in its recent range which is seen as a platform for further increases. It will be interesting to see where the gold market takes us next week after the Easter break, but the consensus among true followers of gold is onwards and upwards. We will see.