Gold News & Info

Source: Melanie Lovatt, BridgeNews

London— COMEX Dec gold futures jumped to a three-week high of $269.2 an ounce near the opening of trade on strong buying from bullion banks and the triggering of buy stops. At 0908 ET, Dec was up $2.4 at $268.0 an ounce. The move surprised some, given that the dollar firmed this morning, a condition that often pressures the price of gold.

Two major New York trading houses were said to have been particularly aggressive buyers. Gold built on its move when it was able to push through buy stops at $267.3 and $267.5, with more buy stops also seen at $268.2. Sources said gold was simply reacting to the bullion bank buying and there was no stimulus from other financial markets, such as the dollar.

Gold prices were also not reacting to this morning's U.S. consumer price index and real earnings reports, sources say. Attempting to figure out the move, David Meger, analyst at Alaron Trading, said that some of the move could have been fund short-covering, as some shorts decided take profits.

Leonard Kaplan, president of Prospector Asset Management, said that if gold is able to hold this morning's gains, prices could jump higher because the market is "horribly short." "Even if we stay here, we could see some short-covering and if we go through $269.5 resistance on cash, it could be off to the races," he said.

Kaplan mentioned that while the dollar is stronger, it is not "horribly" stronger, and while the euro is down, it is not significant. The U.S. dollar strengthened from 1.1650 against the euro early this morning to about 1.1680 near the COMEX opening. New York brokers said they expected some of the shorts to start squaring positions ahead of Thanksgiving and ahead of the end of the year.