Gold on the COMEX rose to a decade high settlement price on a low trading, the last trading day of 2010, as the $U.S. lost ground against its major rivals, thus in turn enhancing gold's appeal as an alternative store of wealth.
The most active gold contract for February delivery jumped 15.5 dollars, or 1.1 percent, to $1,421.4 p/oz, this is the highest gold settlement price ever. Gold's previous record of $1, 416.1 p/oz was reached this year on the 6th of December. Traders are still pointing at the weakness of the $U.S giving gold it's strength, gold appears cheaper to investors trading in other currencies when the $U.S falls.The current U.S dollar index, which measures the $U.S strength against a basket of six other major currencies, slid 0.7 percent to 78.94, still a way off from it's low of 72 in Jan 2010.
The Gold price has risen for the 10th straight year on the trot, closing out 2010 with a gain of 29.7 % in $U.S terms and it looks like we will see continued gains into 2011.
Most traders that I am talking to see the rising inflationary situation and the concern over failing fait currencies such as the $U.S and the Euro. There will be three things that will drive the gold price forward in 2011, firstly increase in investment demand, demand in asia (China) and central banks which were net sellers of gold for years they are now starting to buy gold and increase there holdings.
So it looks like the gold bull is here to stay, well for the moment anyway.
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