Gold price reverses losses on economic worries
Gold rebounded from intraday lows on Monday, adding to last week`s gains, as speculators ditched equities on persistent worries over the pace of the U.S. economic recovery and China`s growth.
Singapore: Gold rebounded from intraday lows on Monday, adding to last week`s gains, as speculators ditched equities on persistent 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 hit a low of USD 1,318.71 an ounce earlier in the session, but stood at USD 1,327.00 by 0710 GMT, up USD 3.99. Last week`s rally lifted prices to a 3-1/2 month high at USD 1,332.10, and 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..
Political tensions in Thailand have yet to spur safe-haven buying but could affect trading activity. Prime Minister Yingluck Shinawatra has left Bangkok and is staying 150 km (90 miles) away, her office said on Monday, without specifying the location.
"I spoke to the Thais and although there are only small deals here and there, generally people are still doing business as usual," said a physical dealer in Singapore.
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 another 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 1,327.10 an ounce, up USD 3.50.
Holdings of the largest gold-backed exchange-traded-fund (ETF), New York`s SPDR Gold Trust increased 0.34 percent on Friday from Thursday, and the largest silver-backed exchange-traded-fund (ETF), New York`s iShares Silver Trust rose 0.65 percent during the same period.
In other markets, Asian stocks dropped on Monday, rekindling safe-haven demand for the yen, as plunging property stocks took a toll on China and investors continued to fret about the impact of the U.S. Federal Reserve`s stimulus withdrawal.
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.