Gold for August delivery was adding $3.40 to $1,550.60 at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,550.70 and as low as $1,543.20 while the spot gold price was up $4.70, according to Kitco's gold index.
nvestors were dabbling in gold and silver as protection Tuesday, but were distracted by a stronger stock market in the U.S as it looks ready to rebound after four straight sessions of losses. If equities see a bounce Tuesday, gold and silver might come under pressure. But if stocks continue their downtrend, gold and silver could see higher prices as investors look for a safe place to stash cash.
Vote: Where will gold prices finish in 2011?
Gold has also been stealthily zeroing in on its record close of $1,557.10 an ounce. Its record intraday high is $1,577.40, but a new record settle could put the metal back on investors' buy lists especially if fund managers jump back into the market.
Phil Streible, senior market strategist at Lind-Waldock, said gold will resume its uptrend "as long as we stay above $1,515." Streible sees prices between $1,580-$1,620 an ounce once gold sees a two-day close above the $1,550 level.
A weaker dollar should help gold and silver prices. The U.S. dollar index is currently down 0.53% at $73.60 as the European Union, IMF and European Central Bank seem intent on helping Greece out of its fiscal crisis.
There are also increased expectations that the ECB at its meeting Thursday could signal an interest rate hike of 25 basis points in July. The key phrase will be "strong vigilance," which has been the signal of a rate hike in the past. Inflation was reportedly 2.7% in May above the central bank's 2% target rate. A rate hike would give more confidence to the euro and pressure the dollar.
Streible points out that gold has been moving with the dollar recently, disrupting their typical inverse correlation, but a weaker dollar makes gold cheaper in other currencies, which will only add to its appeal. Streible isn't scared off by high prices and urges investors who aren't exposed to gold or silver to dollar cost average each month, or buy a set amount of the metals regardless of price.
