Gold rallies despite a strong dollar and high bond yields

GOLD has rallied 3.6 per cent since the start of the auspicious month of November to trade buoyantly around US$1,866 an ounce on Friday (Nov 19). Last week, the yellow metal broke through the resistance at US$1,840, a level which it had tested 4 times this year but failed, only to retreat below US$1,800 on the onslaught of selling pressure.

The intra-month trading range of the yellow metal in November had been impressive compared to past few months. Gold for February delivery on the Comex Exchange had a trading range of almost US$120, from a low of US$1,760 to a high of US$1,880.

Gold's positive return in October and the first 3 weeks of November has been a reversal of its weaker performance this year. The stronger performance had been attributed to seasonality, as well as worries about persistent inflation.