Gold hits 4-week high, buying active

Gold hit a four-week high and broke above a key resistance on Wednesday, defying a stronger dollar, as the festering euro zone debt crisis lured investors to its safety and signs of strong demand from the world's top two consumers also supported. Short-covering after gold breached above the key 200-day moving average -- $1,635.25 an ounce -- may also have helped push up prices, traders said. "While the dollar may not see a significant correction soon, and is likely to continue to gain against the euro as the euro zone crisis persists, the negative effects of a stronger dollar on gold are likely to be largely diminished in 2012, allowing the bullish macro drivers to dictate price action once again," Societe Generale said in a research note.

Source: Business Standard