There are also reports this week of better physical demand for gold, especially from Asian countries, as the new year gets under way.
The U.S. dollar index traded solidly higher Wednesday and hit a fresh 16-month high, yet gold scored gains anyway. The dollar index bulls still have the solid overall near-term technical advantage. With traders focusing more on gold as a safe-haven store of value, they will pay less attention to the value of the U.S. dollar on a day-to-day basis.
Crude oil prices traded modestly lower Wednesday, but are still trading above $100.00 a barrel. Crude oil will remain an important “outside market” factor for the precious metals.
There have been no major, fresh developments coming out of the European Union debt crisis recently. There is another EU summit scheduled for January 30, reports said Wednesday. If recent history continues to play out it won’t be too long until the EU debt crisis is back on the front burner of the market place, which could further boost gold on better safe-haven investment demand. Italian bond yields are still very high, which is a warning signal the EU debt crisis could escalate at any time.
By Jim Wyckoff, contributing to Kitco News; email@example.com