Gold Prices Gain as Investors Eye European Cash Infusion
By Ross Tucker - 02/28/12 - 12:44 PM ESTTheStreet ) -- Gold prices were rising Tuesday as investors shrugged off surging U.S. consumer confidence data and focused on the pending launch of a European refinancing operation. Gold for April delivery was advancing $14.50 to $1,787.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,792.70 and as low as $1,767 an ounce while the spot price was gaining $21.40, according to Kitco's gold index. Silver prices were surging $1.46 to $37.065 an ounce while the U.S. dollar index was falling 0.32% at $78.29.
Economists said that while the report was disappointing, a one month reading does not confirm any sort of trend. "We see no evidence of underlying slowing in the industrial economy so we look for a rebound in Feb and the re-emergence of the upward trend over the next couple of months," said Ian Shepherson, U.S. economist at High Frequency Economics. S&P/Case Shiller reported that its 20-city home-price index saw a year-over-year 4% drop in December. Economists were looking for a 3.6% decline. "While we thought we saw some signs of stabilization in the middle of 2011, it appears that neither the economy nor consumer confidence was strong enough to move the market in a positive direction as the year ended," said the release. The S&P 500 is still up an impressive 4.2% for the month as February draws to a close tomorrow. At the same time, the S&P 500's close at a multi-year high on Monday caused some nervousness that a market top may be coming. Bullion dealer GoldCore noted in a morning report that prices hit a three-month high of $1,787.11 last week, and that prices seem to be consolidating above $1,750 in preparation for a move to $1,800. GoldCore also believes demand from central banks will continue to prop up prices. "Western central bank gold buying is likely to be seen in the coming months and years as western central banks realize the absolute folly of selling their gold reserves in recent years, including and especially the Bank of England, and begin to diversify their foreign exchange reserves by buying gold bullion again," said the company in a report. Nations and international organizations hold 30,877 metric tons of bullion reserves, valued at about $1.77 trillion, according to GoldCore. Mining stocks were largely following gold prices higher. Among the biggest gainers were First Majestic Silver
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