FUNDAMENTALS

Gold prices surged higher on the last trading day of the week underpinned by the weakness in dollar and soaring crude oil prices.  Rising geopolitical tensions after the death of the former Prime Minister of Pakistan Benazir Bhutto in an attack also increased safe haven demand for the metal. Gold futures for February delivery at COMEX climbed higher by $10.9 to close the session at $842.70 an ounce. The contract saw the highs of  $843.80 an ounce during the session. The contract added $27.30 during the week.

The dollar weakened further for the fifth consecutive session Friday. The dollar index, which tracks the value of the U.S. currency against a basket of other major currencies, dipped 0.5% at 76.205, the lowest since Dec. 14. A weaker greenback makes dollar-denominated gold more attractive as an investment alternative.

Rising geopolitical tensions are also supporting the precious metals. Pakistani opposition leader Bhutto died in an attack that also killed at least 20 others after a political rally in Rawalpindi. The incidence occurred just ahead of parliamentary elections in the country scheduled for January 8.

AngloGold Ashanti Ltd., the world's second-largest gold producer, is said to be sitting on one of the world's ten-largest gold reserves after a massive discovery in Colombia. The deposit lies near Ibague in the central province of Tolima and has the potential to double Colombia's gold production by 2011.

TECHNICALS

The prices closed well above short term and medium term EMAs, which supports bulls. MACD is running upwards in positive territory, showing increasing bullish momentum. Stochastic is heading upwards in overbought region. Prices are likely to see range bound movement with bullish bias.

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