Gold bullion largely moved sideways during Monday afternoon trading in Europe, marking time underneath last week's eight-month high, traders said. There was a brief flip-up in early afternoon trading above the $445.00 an ounce level, but prices subsequently subsided after US capital flows data for June failed to have much dollar impact.
"We had a bit of short-covering soon on the (US) open, but it has since settled back," a trader said.
By 1439 GMT, spot gold was at $443.10/443.90 an ounce versus New York's late quote last week at $446.30/447.10. Gold peaked at $449.30 a troy ounce on Friday, which was the highest since early December 2004.
"The market is in a $440 to $450 range at the moment, with $445 the pivot," the trader added.
Others said the outlook was constructive, although there is a need for a correction, given the rapid end-week gains. Prices rose by nearly four percent in just two days at the end of last week as renewed dollar weakness and high oil prices triggered a fresh wave of fund buying.
"I think we need to clean out some of those long positions taken on last Thursday and Friday and only then will it have a chance to fire up again," another trader said.
The CFTC Commitments of Traders report, which tracks speculative positions on the US gold futures market, showed the net long position as of August 9 rose by just over five million ounces.
It did not take into account the strong buying at the end of the week, which some analysts estimate could have added on another 2.5-to-3.0 million ounces.
In the event of a correction in gold, traders were expecting buying to emerge under $440 and down to $438 an ounce.
But many were then looking for bullion prices to target $450 an ounce ahead of the peak of $456.75 scored late last year, which was the strongest spot gold price since June 1988.
In other precious metals, silver was at $7.04/7.07 from $7.06/7.10, platinum fell to $902.00/906.00 from $913.00/918.00, while palladium softened to $183.00/186.00 from $186.00/190.00.
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