Gold (XAU) managed to rebound partially during European trading yesterday amid a boost in investor risk taking after prices fell by more than $30 an ounce earlier this week. The precious metal moved up close to $8 an ounce during mid-day trading, eventually reaching as high as $1727.48 before a minor downward correction dropped the prices into $1725.
As markets get ready to close for the weekend, investors of gold will be alert for any developments in the ongoing budget negotiations between US Congressional leaders. Any activities concerning the looming “fiscal cliff” in US could also result in further risk taking, which would move the gold prices higher.
Silver prices on the other hand could revisit record high next year. However, any gains will rely heavily on a rally in gold stimulating investments as silver struggles to beat a soft outlook for supply and demand, according to metals consultancy GFMS on Thursday.
The euro (EUR) is now trading above 1.30 against the US dollar (USD) while the greenback rose against the Japanese yen (JPY) and now lies above the 82.00 psychological level.