Prices again crept gradually higher in Asian trading prior to some retrenchment in early European trading but dollar weakness was supporting gold and silver. Both bottomed near year end last year on December 29th prior to strong gains in January.
Gold is hovering unchanged ahead of the US FOMC policy statement that takes place at 1730 GMT and Ben Bernanke’s news conference is at 1915 GMT. Investors believe that the Fed will reveal more bond purchases and a continued loose monetary stance.
The gold price traded in a narrow range around $1,691 per ounce Thursday morning in London, rising slightly from yesterday's 1-month low. Asian and European stock markets also ticked higher, as did US Treasury bonds.
Gold is flat today and appears to be consolidating on yesterday’s gains. Conflict in the Middle East and Moody’s downgrade of France’s AAA rating will support gold. Indeed, the Moody’s downgrade of France shows how the global debt crisis is spreading.
Fundamentals always trump psychology in the long run. The gold miners are making profits hand over fist at recent gold levels, driving this sector deep into value-investment territory. Eventually new investors inevitably take notice of extreme values.