Spot Gold prices have rallied for a third consecutive session Wednesday, trading at its best level in nearly two weeks, buoyed by growing geopolitical tensions between Iran and the West. Gold prices reached an intra-day high of $1613.26 shortly after European stocks opened, before prices corrected back to $1603.75. Haven flows continue to provide support, after Iran’s military chief Ataollah Salehi warned the US against sending an aircraft carrier back to the Persian Gulf. The USD has remained reasonably firm in FX markets, despite some growing expectations that additional monetary easing may be lurking in the US. Speculators of gold, particularly bulls, are probably becoming reliant on some short term demand from China, which typically peaks during the Lunar New Year, due to begin on Jan 23 this year. The market also appears to be dangerously pre-empting the US Federal Reserve implementing a third round of quantitative easing at some stage during the first quarter of 2012. Spot Gold prices have now pared back to unchanged levels, and are currently trading $1604.
EasyForexNews Research Team