Last week, gold prices advanced for majority of the trading sessions, with Europe’s uncertainty continuing and increasing tensions between U.S. and Iran driving prices back above $1600.
Spot prices snapped a four day winning streak on Friday, after providing ample profit opportunities and recorded the largest winning streak since October.
An interesting fact of note is that during the past week the yellow metal price and the US Dollar moved in the same direction, despite traditionally sharing an inverse relationship. Following declines during the last month of 2011, analysts believe that current price levels are stimulating demand, thereby causing the inverse relationship to break.
An increase in buying from India and China has also left the prices buoyant. However, the weaker rupee and higher interest rates in India limited the rise.
Gold prices were approaching the 200 DMA at $1633 and it’s hard to see if it will break above this level, with the Eurozone debt crisis still leaving a considerable amount of uncertainty in the markets.
A survey released by Kitco News, sees weaker gold prices in the week ahead, with the Eurozone troubles forcing traders to return to the safety of the U.S. dollar.
In spite of facing current headwinds, analysts still remain bullish on the price of gold for the year ahead.
