Gold heads into new year with final quarter loss
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Gold heads into new year with final quarter loss

Last Updated: Friday, December 30, 2011, 09:12
 
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Gold heads into new year with final quarter loss
Singapore: Spot gold is ending 2011 on a weak note after ten consecutive annual gains, heading for its first quarter of losses in more than three years and a new year likely to be dominated by worries about economic growth and sovereign debt.

US gold rose more than 1 percent on Friday, as sharp falls in the previous session triggered buying interest on the Shanghai market, helping push spot gold up 0.8 percent.

This brings spot gold to a near-10 percent gain for the year, but the precious metal is down about 19 percent from the record peak of USD 1,920.30 an ounce hit in September.

The most-active US gold futures contract gained 1.2 percent to USD 1,559.90 by 0244 GMT, snapping six consecutive sessions of losses.

Spot gold rose 0.8 percent to USD 1,557.94, on course for a weekly decline of 3.2 percent. It was headed for a monthly loss of nearly 11 percent.

"There was buying interest from Shanghai when the market opened there," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

The active Shanghai gold forwards opened at 312.45 yuan a gram, about USD 14 below spot gold prices. But the gap quickly closed, as Shanghai gold rose to 318.25 yuan, about USD 9 above spot prices.

The upcoming Lunar New Year in about three weeks will help support gold consumption in China, traders said.

Technical analysis suggested that spot gold could rebound to USD 1,588 during the day, said market analyst.

Concerns about the eurozone debt crisis continued to weigh on the single currency after Italy's bond auction failed to attract much buying interest and the European Central Bank had to step in and buy Italy's bonds in an effort to slow rising yields.

On the other side of the Atlantic, US employment, housing market and manufacturing data pointed to growing momentum in the world's largest economy.

The dollar index edged lower, after rising to its highest in more than 11 months in the previous session.

A pricier dollar weighs on gold and other commodities as it makes them more expensive for buyers holding other currencies.

Bureau Report




First Published: Friday, December 30, 2011, 09:12


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