Gold rose on Monday after hitting a three-week low, with bargain hunters and physical buyers supporting a market that remained vulnerable due to thin trading ahead of Christmas.
Platinum was also choppy, hovering near a five-week low of $1,094 an ounce hit on Thursday - well below a record high of $1,395 reached on November 21. "It appears that the market wants to see a weaker dollar and that's going to underpin the precious metals, especially gold and silver," Jeremy East, head of metals trading at Standard Chartered bank, said.
"We are coming into the year-end, coming into more illiquid markets. If we see the dollar start weakening, we can easily see gold back up to $650, $660 again," he said. Gold touched a high of $628.20 and a low of $622.60 before settling at $626.10/627.60 an ounce by 1519 GMT, against $624.70/626.20 late in New York on Friday, when it fell $6.
The dollar steadied against other major currencies, giving back some of last week's gains made after solid US jobs data helped to ease concerns that the Federal Reserve may need to cut interest rates early next year. Dealers said the dollar would continue to give direction to the market in the near term. They awaited the Fed's last meeting of the year on Tuesday for hints as to the dollar's outlook.
Gold usually moves in the opposite direction to the dollar. A stronger greenback makes gold, which is denominated in dollars, more expensive for holders of other currencies.
"We continue to forecast that gold will trade higher in the New Year and hold our one and three-month forecasts at $660 and $690, although we do not rule out further periods of weakness ahead of the year end," John Reade, head of metals strategy at UBS Investment Bank, said in a daily note.
The physical sector was active in Hong Kong and other parts of Asia as jewellers purchased gold on the price dips, helping the metal stay above $620. "There's sporadic buying and people even think $623-$624 is a good level to buy. Some jewellery shops are covering their short positions, and I guess some may be running out of stocks," said a dealer in Hong Kong.
In other precious metals, platinum fell to $1,098 an ounce before rebounding to $1,106/1,112, up $1 from its close in the US market. Spot silver was last quoted at $13.69/13.76 an ounce, a shade higher from $13.67/13.74, while palladium was down $1 at $325/330.
Comments
Comments are closed.