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Rising Demand for Gold as Alternative Currency

April 27, 2010 at 18:57 by Vladimir Vyun

Gold gained as a speculation that Greece won’t receive an aid soon spurred a demand for the precious metal as an alternative to traditional currencies. Gold priced in the euro and the Swiss franc reached records, while the precious metal priced in pound jumped to almost all-time highest level. The dollar’s 4.9 percent rally against a basket of six major currencies this year hadn’t significant impact on a gold price, supporting the viewpoint that gold can be considered yet another currency. The weak dollar still benefits the metal, yet the strong one isn’t necessary hurt it anymore.

An increasing investors’ demand boosted sales of old jewelry and other scrap gold. Asia still provides steady consumer base for a physical selling.

Analysts say that gold needs to noticeably jump above the old highs to continue its rally. The metal must rise above the $1,160 level of previous resistance to attract more investors.

June futures for gold delivery in gained $6.90 (0.6 percent) to $1,160.90 per ounce by 10:49 on the Comex in New York. Highest level of $1,170.70 for gold prices in the year was reached on April 12th. Futures reached their all-time high level of $1,227.50 on December 3rd.

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