Gold goes up as dollar weakens (Reuters) (18-01-2011)

SINGAPORE – Gold was higher on Tuesday, extending gains in the previous session, following a healthy physical demand out of Asia and a weak dollar.

Spot gold edged up 0.3 percent at $1,365.85 an ounce by 0642 GMT, after dipping to an intraday-low just below $1,360 while it is estimated to be range bound between $1,354 and $1,370 for one trading session before plunging again towards $1,349 per ounce, as the downtrend is still intact.         

U.S. gold futures gained 0.4 percent to $1,366 and premiums for gold bars rose, hitting another two-year high as jewellers from China rushed to buy ahead of the Lunar New Year.

After rallying 30 percent in 2010, gold has lost about four percent so far this year, being the second worst performer of the complex just after silver. The medium- to long-term outlook on gold remains bullish, but gold is seen losing steam after economic outlook in the U.S. and Europe improves, luring investors to riskier assets, according to analysts.

This week's U.S. banks earnings, expected to be strong, could give investors more reason to be optimistic about the sector and the economy in general.     

Spot silver gained more than half a percent at $28.42 an ounce, down eight percent so far this year.

Source: Reuters