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Friday, 30th June 2006 (4599 views)

The US Federal Reserve announced it would be raising interest rates for the 17th straight month this week, prompting gold to break back above the $600 an ounce mark today (30th June).

The news meant the price of the precious metal gained 1.7 per cent in Friday morning trading in London, as the US dollar lost value following the Federal Reserve statement.

Gold (XAU) rose to a two-week high price of over $602 an ounce on the London exchange, although traders suggested that because of the approaching long weekend for Independence Day in the United States, the market would be fairly quiet.

"If the market can hold above the key 100-day moving average, it could be poised for higher targets at $615," said Standard Bank. "However, the long holiday weekend in the US would suggest muted activity rather than any runaway markets."

With the weakened currency, other precious metals also experienced price surges, with platinum reaching a three-week high and silver rising to its highest level for over two weeks.

 

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