Gold was little changed around $655 an ounce on Tuesday, with wary investors staying out of the market due to the dollar's recent strength and gains in stock markets. In Tokyo, gold futures failed to sustain gains and ended lower. Investors awaited the release of US data, which may offer new leads for the dollar and precious metals.
Spot gold was at $655.30/655.80 an ounce, against $655.35/655.85 late in New York on Friday and within sight of a nine-week low of $651.30 hit last on Thursday. The US market was closed on Monday for a holiday. Trading resumes on Tuesday. "I suspect the gold price might have a downward bias tonight," said David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney. "I am not so sure if there's a specific support level. If it's still to go below $650, it might trigger some more selling," he said.
Invested Australia pegged supports at $650 and resistance at $682 an ounce. Gold sales by European central banks under a five-year pact that started in late 2004 failed attempts to retest $700 as well as rising stock markets that encouraged some investors to ditch gold holdings have dampened sentiment in recent days.
Bullion rallied to an 11-month high of $693.60 on April 23 but other attempts to approach $700, a level last seen in May 2006, were met by profit taking. Asian stocks edged up on Tuesday, with Japanese shares rising after positive jobs and spending data and firmer metals prices pushing up Australia's big miners.
The Nikkei rose 0.48 percent. Key April 2008 gold futures on the Tokyo Commodity Exchange hit an intrude high of 2,595 yen per gram before ending 8 yen down at 2,585 yen. "The dollar continues to drive gold prices, but I feel that gold has largely completed its downside correction after recent falls," said Akira Doe, a director at Daiichi Commodities Co Ltd in Tokyo.
"$650 continues to be solid support, while the market has been capped around the 100-day moving average. The volume of gold ETFs is slowing climbing again," said Doe, referring to exchange traded funds. Gold may gain upward momentum once it breaks above the 100-day moving average of $661, he said.
The yen bounced from a three-month low against the dollar after a drop in Japan's jobless rate and better-than-expected consumer spending figures further stoked expectations the Bank of Japan will raise interest rates in the coming months.
The dollar eased to 121.40 moving away from 121.89 yen hit last on Friday, its highest level since mid-February. The dollar held near a seven-week peak against the euro ahead of a series of economic data that may revive receding expectations of a Federal Reserve interest rate cut.
Investors will scrutinise the minutes of the Fed.'s last rate-setting meeting due on Wednesday, before the release of the second estimate of first-quarter growth data on Thursday and the important payrolls report due on Friday. The euro was little changed at $1.3440 and within sight of a seven-week low of $1.3411 hit on Friday.
Platinum fell to $1,265/1,270 an ounce from $1,266/1,270 late in New York. Palladium rose to $365/370 from $363/367. Silver inched up to $12.93/12.96 an ounce from $12.92/12.96 an ounce.
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