Gold sat tight in Asia on Monday, but high crude oil prices helped the yellow metal to offset a firmer dollar, which normally reduces gold's safe-haven appeal. Spot gold was trading at $433.70/435.50 an ounce, even with $433.70/434.50 last quoted in New York. Buying interest, albeit limited, pushed gold to a high $434.50 an ounce in Asia not far from a one-month high of $435.75 an ounce hit on Friday, when the dollar weakened on worries about inflation and slowing US economic growth. Trading was muted because of a holiday in Australia and weakness in Tokyo gold futures.
The euro was lower than New York's levels at $1.3018 off a one-month high of $1.3125 last week. A stronger dollar makes dollar-priced gold more expensive for holders of other currencies. "It looks like the market can possibly trade a bit lower.
Europe might just buy it back as it comes in, but it's going to be a very thin market today," said one dealer in Singapore, which is Southeast Asia's biggest bullion trading centre.
"The market finds resistance at around $440. I don't think we are going to see gold going up there unless we have new US data coming out or some weakness in the dollar," he said.
Some dealers saw gold trading in a $433-to-$436 range on Monday, with firm crude oil prices providing some support. A rise in oil prices rekindles fears of inflation and boost gold's status as a hedge against inflation.
US crude futures extended a weeklong rally triggered by fears of a summer gasoline squeeze in the United States, trading up 57 cents at $55.95 a barrel.
Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, said the bullion market was quiet, awaiting fresh economic data from the United States for clues on the health of the US economy.
"Both buying and selling are very limited," said Lunge. In other precious metals, platinum was trading at $875/880 an ounce, versus New York's $873/876 an ounce. Silver was quoted at $7.23/7.25 an ounce against $7.25/7.28 last quoted in New York. Palladium was at $199/204 an ounce, versus $200/203 late in the US market.
The benchmark February gold futures contract on the Tokyo Commodity Exchange fell seven yen per gram to 1,482 yen.
Comments
Comments are closed.