Gold nudged higher in Asia on Monday, hovering close to a near-18-year peak on continued support from inflation worries and steady physical demand, but trade was thin due to holidays in Japan and the United States.
Spot bullion was at $474.75/475.50 an ounce, up from $473.80/474.50 in late New York trade on Friday. Spot gold touched $475.60 on Friday; it's highest since January 1988.
"Japan is out and the US is out tonight. It's absolutely dead," one trader said. On Friday, US gold futures also finished at the highest close in nearly 18 years, boosted by investment and safe-haven buying amid jitters over the threat of attacks in New York, dealers said. "I am still relatively bullish for gold and the funds are going to hang in with their long positions for a while," the trader said. However, he said it was advisable to have some form of protection on the downside after the investment fund long position in Comex gold futures hit a record high last week.
According to Commitments of Traders data from the Commodity Futures Trading Commission on Friday, the non-commercial net long position rose to 171,498 contracts as of October 4 from 166,100 contracts a week.
"That's the biggest position that I have seen since I have been monitoring," the trader said, adding that there was a big risk that some physical selling by European central banks would trigger a sell-off by funds.
He put a target for the upside at $477 and $480, with support at $470 and then $465. But another trader said: "I don't expect a sell-off just because of the CFTC (data) Maybe we can see a little correction.
But I would be favourable on the topside rather than a correction to the downside." Many traders and analysts feel gold can hit $500 in the near term, propelled by solid demand for investment and jewellery as well as lofty energy prices and forecasts that there could be less mine production in the near future.
The euro was little changed from Friday's closing levels around $1.2124, while oil rose to $61.91 a barrel after ending a five-day slide on Friday.
In other precious metals, spot silver rose to $7.73/7.76, the highest since December 8, from $7.70/7.73 last quoted in New York.
Funds have lifted silver to mufti-month peaks as the precious and industrial metal drew strength from a rally in the copper market and from higher gold prices.
Copper set an all-time high above $3,930 a tonne as Chinese investors bought the industrial metal. Platinum was at $932/936 from $932/935, while palladium was at $200/204 against $200/203 an ounce.
Comments
Comments are closed.