Gold price makes stab at $1,200
Gold made a bold move higher on Friday recovering most of the losses suffered earlier in the week despite a fresh slide in the price of oil and a jump in the value of the US dollar to nine-year highs.
In late afternoon trade on the Comex division of the New York Mercantile Exchange gold for February delivery was changing hands for $1,193.60 an ounce, up $20.10 or 1.7% from its pre-Christmas day close.
Early in the day the metal made an unsuccessful attempt at scaling the psychologically important $1,200 an ounce level reaching a high of $1,199.10, with moves up and down exaggerated by thin holiday season volumes.
The US dollar enjoyed another solid day on Friday coming close to topping Tuesday's level which was the highest since end-November, 2005. The dollar index has strengthened 11.7% in 2014 against a basket of currencies, with almost all the gains coming since August.
Gold and the dollar usually move in opposite directions.
After gains earlier in the day in after hours trade crude oil slipped again with the US benchmark West Texas Intermediate dipping to $54.6 a barrel, a loss of more than 2% on the day.
Gold and oil usually rise and fall in tandem – rising oil prices pushes up inflation increasing demand for gold as a hedge – but with the sharp fall in oil, the commodities have been diverging.
Since 1970 the average ratio – how many barrels of oil can be bought with one ounce of gold – is around 15.
Gold's strength on Friday also came into the teeth of another record-setting day on US stock markets. The Dow Jones blue-chip index was on course for its 38th record close this year, while the broader S&P500 was also likely to close at an all-time high.