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Gold charges above $455 an ounce on weak U.S. dollar

Gold charges above $455 an ounce on weak U.S. dollar < News < Bet On Markets

NEW YORK (Dow Jones/AP) -- February gold futures hit fresh contract highs of $455.30 per ounce Monday as sustained weakness in the U.S. dollar and a bright technical, or chart, pattern continued to steer speculative players toward gold.

Volumes were steady to strong on the Comex division of the New York Mercantile Exchange as U.S. players returned to the market following the Thanksgiving holiday to find the U.S. currency near historic lows against the euro and at multiyear lows on the U.S. Dollar Index.

With gold viewed as an effective hedge against the dollar’s weakness, buyers of bullion easily outnumbered sellers through the session.

However, with spot gold prices clambering to 16-year highs, above $450 an ounce recently, the pressure for many speculators to take profits on purchases made at lower levels is increasing.

Some sources predict hedge-fund players will seek to sell before long in order to secure profits before the calendar year ends.

«There’s still a lot of reasons to buy gold right now, but at some point a correction and some profit taking has to take place. So we have to be prepared for that,» argued Peter Grandich, editor of investor newsletter «The Grandich Letter.»

By 11:30 a.m. EST Monday, however, prices remained facing higher with February futures quoted around $455.10-$455.30.

March silver pushed to $7.83 an ounce and 7-month highs by late morning.

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