Gold price edges lower after third week of gains
Singapore: Gold inched lower on Monday after posting a third straight week of gains, but the precious metal may get support from worries over the pace of the U.S. economic recovery and China`s growth.
Investors on Friday had increased bullish bets on bullion after prices broke through tough resistance at USD 1,300 an ounce, with weak U.S. manufacturing data and uncertainty over China`s economic expansion lifting the metal`s safe haven appeal.
Gold eased 0.29 percent USD 1,321.35 an ounce by 0224 GMT as speculators booked profits from last week`s rally, which lifted prices to a 3-1/2 month high at USD 1,332.10. Gold has gained more than 9 percent so far this year.
"I think USD 1,335 seems to be capped for the time being," said the chief dealer at Lee Cheong Gold Dealers in Hong Kong, referring to the next resistance level.
"There are small amounts of buying in the physical side, although selling is also not that much. Premiums haven`t changed at all," he said.
Premiums for gold bars in Hong Kong were stuck in a wide range of USD 1.30 to USD 1.70 an ounce to spot London prices, unchanged from last week..
Gold premiums in Singapore, a centre for bullion trading in Southeast Asia, were also unchanged from last week at USD 1.20 to USD 1.50 an ounce to the spot London prices.
"Physical demand is slow, but I saw some buying at around USD 1,320 after copper prices dropped more than 1 percent earlier," said a physical dealer in Singapore.
London copper fell sharply on Monday to its lowest in more than two weeks as worries about tightening monetary policy in the United States and fragile growth in China hurt the demand outlook for industrial metals.
U.S. gold was at USD 1,321.40 an ounce, down 0.17 percent, after gaining 0.4 percent last week.
Holdings in SPDR Gold Trust, the world`s largest gold-backed exchange-traded fund, rose 0.34 percent to 798.31 tonnes on Friday from 795.61 tonnes on Thursday.
In other markets, Asian stocks wobbled and the dollar firmed in early trade on Monday, as investors appeared to give no more than a passing nod to the Group of 20`s latest commitment to spur faster global growth.
The world`s top economies have embraced a goal of generating more than USD 2 trillion in additional output over five years while creating tens of million of new jobs, signalling optimism that the worst of crisis-era austerity was behind them.