Gold Ends up 3.5%, Breaks $1,600 Resistance, as US Dollar Sinks on Euro Summit Plan

By Midnight Trader,  June 29, 2012, 01:54:23 PM EDT

Gold for August delivery on the Comex division of the New York Mercantile Exchange settled up 3.5% at $1,604.20 an ounce, breaking through the key psychological $1,600 resistance level and ending near the highs of the day. Gold was up 2% for the week, but down 4% for the second quarter.

Gold rallied strongly as the U.S. dollar plunged against major currencies after European leaders put forward a plan to directly recapitalize the region's banks. It may not have been fabulous news, but it was enough to spur a relief rally in equities and many hard assets given that expectations heading into the EU summit were so low. A weaker greenback makes it cheaper to buy gold and other commodities in foreign currency terms.

Gold stocks on the TSX performed solidly. Barrick Gold was last quoted up 2.2% at $38.28, Kinross up 1.6% at $8.28, and Centerra Gold -- which plunged Thursday as a director resigned amid heightened political concerns over its Kumtar gold project -- is up 2.5% at $6.89.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Commodities

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