Gold and silver rise sharply as the US Dollar Index is hit

SAN FRANCISCO (Aug 23)   Gold prices perked up on Friday after an overall lackluster trading week, and a strong close on a Friday is a positive technical chart-based signal, several said.

Jeffrey Nichols, managing director, American Precious Metals Advisors, and adviser to Rosland Capital, said he sees prices rising next week, especially after seeing gold rally following the weaker-than-expected July new home sales data.

“This knee-jerk reaction underscores just how sensitive the prices of gold and other financial assets are to changing expectations -- pro and con -- of imminent tapering. My short-term bullish view (for the next few weeks) is based on my belief that the economic news will continue to disappoint those expecting a rosy economic recovery -- both among the Fed-watching community and among the Fed governors who set policy,” he said.

Those who see weaker prices next week said they haven’t been pleased with gold’s near-term price action.

Bob Tebbutt, of Armour Risk Asset Management, said gold is coming to a critical point. “A move above $1,400 would be very bullish but the market move since the end of June may be getting tired. So I think the market is likely to ease off for a short period of time that could take it back to $1,300,” he said.

By 1pm ET gold was up nearly $19 to $1396, while silver surged 62 cent to $23.74.