Gold edged down in Asia on Thursday as worries about the impact of Hurricane Katrina on the US economy began to subside, helping the dollar extend gains against major currencies.
Spot gold fell slightly to $444.50/445.00 an ounce in afternoon trade from $444.80/445.50 an ounce last quoted in New York on Wednesday. It had touched a low of $443.80 in Asia.
The metal was likely to trade in a familiar $440 to $447 an ounce range this week with key support seen at around $442. The dollar has rebounded as part of a broader reassessment of risk across financial markets following Hurricane Quatrain.
Comments from Chicago Federal Reserve President Michael Moscow that US rates must contain inflationary pressures and an upbeat report from the Fed on the US economy before Hurricane Katrina also signalled the central bank would probably raise interest rates when it meets on September 20. Rising interest rates tend to boost the dollar and puts pressure on gold, which is used as an alternative investment.
But some dealers said gold had more or less factored in future increases in US interest rates. "To be honest, I think people are quite immune.
At this moment, I don't think an interest rate hike will be of a great help to the US economy because of the Quatrain thing," said Ellison Chu, senior manager at Standard Bank London in Hong Kong.
"I think the upside will be at around $450. People are still waiting for fresh ideas on how to push gold up; looking at the oil price, the US dollar and everything," he said.
The euro was little changed from New York's levels at around $1.2420.
Gold has repeatedly breached key resistance of $445 this week but failed to sustain at the level.
Dealers said dollar weakness and poor economic data from the US would be needed to help gold reach $450. Gold hit a 2005 peak at $449.30 on August 12 and a break above that level would help the precious metal approach the December 2004 peak of $456.75 its highest level since June 1988.
The physical sector saw limited activity mainly because jewellery manufacturers were waiting for a price correction and investors were unsure about direction.
That kept premiums for gold bars unchanged from last week's levels in key bullion trading centres such as Singapore and Hong Kong.
Some dealers expect gold to trade in a wide range of $430 to $450 in the next few weeks, with good physical demand seen emerging around $430 an ounce.
Other precious metals were mixed. Silver hardly changed from New York levels at $7.04/7.06 an ounce. Platinum rose to $907.50/912.50 an ounce from $903/907 last quoted in New York, mainly due to gains in Tokyo platinum futures.
Palladium was steady at $182/187 an ounce.
Comments
Comments are closed.