Gold held firm on Wednesday after a weak Portuguese debt auction stoked concerns over the fragility of the eurozone banking sector, knocking the euro, but gains were limited by softer investment demand. A 6.1-tonne fall in holdings of the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, on Tuesday, their biggest one-day decline since December, indicates waning investor confidence in the metal, analysts said.
Spot gold was bid at $1,192.85 an ounce at 1502 GMT, against $1,191.40 late in New York on Tuesday. US gold futures for August delivery rose $1.50 an ounce to $1,193.20.
"I think gold can get back above $1,200 an ounce," said Citigroup analyst David Thurtell. "There was a lot of buying in April, May and June on the back of these sovereign debt worries. Once some of those fears subsided, gold came down again, but there are still enough people out there who are worried to buy gold below $1,200."
Among other commodities base metals such as copper strengthened after strong US corporate earnings raised optimism over the strength of the recovery in the world's largest economy. Looking ahead, the financial markets are awaiting Federal Reserve Chairman Ben Bernanke's testimony on economic and monetary policy before Congress later on Wednesday.
Gold has slipped since reaching a record $1,264.90 an ounce at the end of June, boosted by investment in the metal as a haven from volatility in other markets amid concerns over the economic outlook and eurozone sovereign debt levels. Respondents to a Reuters poll of 55 analysts, traders and fund managers said they see gold prices posting an eleventh year of gains in 2011 as investors seek refuge from an uncertain global economic outlook.
The poll showed expectations for gold prices in 2011 have risen by nearly 7 percent to a median $1,228 an ounce since a similar survey conducted in January. For 2010, expectations for gold have risen by 4 percent to a median $1,197.00 an ounce.
"The market is expected to derive strength from further economic pitfalls and the near-zero interest rates maintained by the US Federal Reserve," said Harish Galipelli, head of commodity research at JRG Wealth Management. Among other precious metals, silver was at $17.74 an ounce versus $17.65, platinum at $1,521.50 against $1,512.95 and palladium at $451.0 versus $449.53.
Refiner Johnson Matthey reported a 47 percent rise in first-quarter profit as it recovered from a slump in demand, and forecast an improved full-year performance. The platinum refiner and the world's largest supplier of catalytic converters said on Wednesday April-June sales excluding precious metals rose 32 percent year on year.
Comments
Comments are closed.