Gold edged above $1,350 an ounce on Monday after the metal's first weekly rise this year lifted investor confidence in the metal, though a more optimistic view of the global economic outlook is continuing to weigh on prices. A run of above-consensus economic US data this year has lifted demand for higher-risk, higher-yielding assets at gold's expense, leading to a 5 percent dip in prices in 2011 so far.
Spot gold was bid at $1,350.30 an ounce at 1630 GMT, against $1,346.90 late in New York on Friday. US gold futures for April delivery were up $2.20 at $1,351.20. "Fundamentally, gold seems to have taken a beating with investors, especially ETFs, offloading a large part of their gold as key economies are turning to normalcy, or are at least in the process of that," said Pradeep Unni, a senior analyst at Richcomm Global Services.
Gold prices were supported by a slight rise in physical demand from Asia as buyers in Singapore and Hong Kong returned to the market after last week's New Year celebrations, although China, the world's second-biggest gold consumer, remains absent.
Investment demand for gold-backed exchange-traded funds was soft, with holdings of the largest, New York's SPDR Gold Trust, dipping by 0.4 tonnes on Friday. The weekly Commitments of Traders report from the Commodity Futures Trading Commission showed the Comex gold book declined by just 183,000 ounces, according to UBS, as short covering became "nearly as prevalent as long liquidation".
Silver was at $29.36 an ounce against $29.08. Platinum was at $1,842.50 an ounce against $1,842, and palladium at $817.22 against $811.50. The chief executive of Anglo Platinum, the world's top platinum producer, said on Monday he expected platinum prices to average at least $1,800 per ounce in 2011. He said he expects the market to remain in balance.
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