Gold prices linger around $1,200, taper worries remain
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Gold prices linger around $1,200, taper worries remain

Last Updated: Tuesday, December 24, 2013, 23:04
 
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Gold prices linger around $1,200, taper worries remain
Singapore: Gold held steady on Monday after its biggest weekly loss in a month, but the metal was still at the risk of falling back below $1,200 an ounce as investors fretted over the impact of a U.S. stimulus tapering.

Prices were supported in thin Asian trading as holdings of SPDR Gold Trust, the world`s largest gold-backed exchange-traded fund, rose 5.40 tonnes to 814.12 tonnes on Friday - the first inflow since November 5.

"There seem to be subtle shifts in sentiments for more bullishness after $1,200 was broken," said Joyce Liu, an investment analyst at Phillip Futures Pte Ltd.

"However, the upside is limited due to year-end holiday season and with prices now treading close to $1,200, a break below that level may shift market sentiments back to bearishness."

Spot gold eased 0.1 percent to $1,201.25 an ounce by 0328 GMT. It rose 1 percent on Friday on short covering after losing 4 percent in the previous three sessions.

Gold fell 3 percent last week after the Fed said the U.S. economy was strong enough to scale back its massive bond-buying stimulus, winding down an era of easy money that saw gold rally to an all-time high of $1,920.30 an ounce in 2011.

The metal has fallen nearly 30 percent this year on fears that a scale back of stimulus would hurt its inflation-hedge appeal.

The decline this year is gold`s biggest fall in 32 years.

Physical demand picked up in Asia as prices fell towards $1,200 last week but not to the same level seen during earlier price drops this year. Volumes traded on the Shanghai Gold Exchange on Monday were lower than last week`s as buyers waited to see if prices could drop further. Premiums remained stable at $16 an ounce.



Reuters

First Published: Monday, December 23, 2013, 14:24


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