Gold prices 'poised to rise' - Wednesday 4th June 2008

Gold prices could be poised to climb in the coming months after a strength index for gold futures was found to have declined.

According to Bloomberg, analysts believe that gold prices could soon rise due to the fact that the 14-day relative strength index dropped to 42, which has previously supported the precious metal.

This is because it increases the prevalence of gold buying by people who take advantage of price consolidation.

Matthew Zeman, a metals trader at LaSalle Futures Group in Chicago, told the news provider that physical buyers are returning to the market.

"People are thinking it's better to buy now at these discounted levels, than wait as it moves higher and have to buy at full price," he explained.

Meanwhile, Stephen Briggs, an analyst at Societe Generale in London, commented that gold prices could rise thanks to a "bearish bias towards the dollar".

The gold market is anticipating the release of data from Federal Reserve chief Ben Bernanke later this for clues to the future direction of currency and precious markets.

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Goldbug, 04 Jun '08

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