Gold edged higher above $940 an ounce on Thursday, underpinned by light physical buying as investors eyed the currency market for clues on the precious metal's direction. Doubts about a nascent global economic recovery had recently prompted investors to sell riskier assets and pile into safe-haven bets including the dollar and US Treasuries.
But a fall in the dollar this week fuelled investors' tolerance for such riskier assets as stocks and commodities. Spot gold stood at $943.40 an ounce at 0549 GMT, up 0.2 percent from New York's notional close of $941.55. It hit a near three-week low below $930 per ounce on Monday.
US gold futures for December delivery were at $945.00 an ounce. The contract on Wednesday settled up $5.60 at $944.80 on the COMEX division of the New York Mercantile Exchange. "At a level below $940, some physical demand picked up in the past few days. But the volume was not that much," said Dick Poon, manager of precious metals at Heraeus in Hong Kong.
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