Mar 4

Written by:
3/4/2010 10:12 AM 

By Adrian Ash | Bullionvault.com

Gold bounced above Wednesday's low of $1,133 an ounce for U.S. investors early in London trade on Thursday, rising back to $1,140 by lunchtime as the dollar eased back on the forex market and European shares held flat.

"Unlike the start of the week, we're now seeing a greater amount of scrap and physical (gold) selling," according to Standard Bank's commodity note.

"Long liquidation and physical selling in gold and silver was evident" in Asian trade, agreed a Hong Kong dealer.

Donald Coxe, strategy advisor at BMO Capital Markets, noted that the 2009 peak in U.S.-Dollar gold prices came even as scrap-gold supplies surged and physical demand from India and the rich West collapsed.

"That the gold price can survive during a period of such key fundamental negatives – and in fact increase despite them," writes Lawrence Williams at MineWeb – "suggests a major underlying confidence in gold as a store of value, and this should continue as long as economic turmoil persists, which may be for some time yet."