Friday, December 01, 2006

All that glitters

NEW YORK, Nov 30 (Reuters) - U.S. gold futures rallied
above $650 an ounce Thursday as a struggling dollar and firmer
energy prices prompted investors to buy after the metal fell in
the previous two sessions.

James Quinn, commodities commentator at AG Edwards,
attributed gold's gains to a weaker dollar and stronger crude
oil prices.

He said sentiment in the precious metals market remained
upbeat. "It doesn't look like the dollar is ready to move
higher at this point."

The dollar traded at 14-year troughs against Sterling and
remained near a 20-month low versus the euro Thursday,
extending its broad slide on worries about the U.S. economy and
the possibility of an interest rate cut.

A soft greenback adds to the allure of gold, which is
priced in U.S. dollars, for holders of other currencies. Higher
energy prices, meanwhile, make gold a more attractive
investment as the metal is generally seen as a hedge against

The "price of gold" is rising strongly, therefore you should buy the Aussie gold miners, right? Well, go right ahead, but consider the following graph first:

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