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Gold prices today rose markedly , reaching a three-month high at the same time , and showing its biggest weekly gain in the past six months, as a series of weak U.S. data , which were released this week , have raised concerns about economic growth and put pressure on dollar .
Spot gold prices rose to a high of $ 1,320.90 an ounce, the highest since November 7. For the week, prices rose by 4 per cent , showing the largest increase since mid-August .
" Gold continues to trade very well , punching with one key resistance level after another ," said BofA Merrill Lynch analyst Michael Widmer . " From a fundamental point of view , we can assume that gold will continue its upward trend ."
The technical picture has improved over the past few sessions and prices were above its 200 -day moving average , the last time was registered in August 2012 .
However, some traders noted that the 14 - day relative strength index (RSI) for the spot price of gold was at 73.7 . An index value above 70 indicates that the market is overbought .
Add that with the beginning of the year prices rose by almost 9 percent , after falling 28 percent in 2013 on doubts about the recovery of the U.S. economy , as well as turmoil in emerging markets, which put pressure on some markets .
However , analysts remain cautious about the medium-term prospects for gold. Many expect the U.S. economy to recover and the dollar will start its rally , which would put pressure on gold , which is generally regarded as a safe haven in times of trouble .
We add that the current rise in gold prices has also helped improve sentiment among investors that directly affected the fund SPDR Gold Trust - stocks rose by 7.5 tons to 806.35 tons , registering the largest inflow since late December .
Physical demand , meanwhile, can be reduced in marked increase in prices and the possibility of another fall that keeps buyers at bay.
The cost of the April gold futures on the COMEX today rose to $ 1316.60 per ounce for ounce.
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