Gold pared gains after rising toward its record high on Wednesday, as a pullback in crude oil prices offset safe-haven buying inspired by mounting unrest across the Arab world and renewed eurozone debt worries. Gold largely tracked movements in oil, which rose earlier in the session as pro-democracy protests spread from Libya to Yemen and Kuwait, prompting worries that outweighed Opec assurances of ample spare capacity.
US crude oil later turned slightly lower.
"Crude oil is really trading as the barometer of fear right now, and the lack of follow through in the upside of crude is taking some of the flight-of-quality aspect out of the gold market right now," said Adam Klopfenstein, senior market strategist of MF Global's Lind-Waldock. Gold prices are underpinned by weaker global equity markets as Portugal's cost of borrowing hit a new high ahead of Friday's eurozone summit to resolve the region's debt crisis. Analysts, however, said the meeting is unlikely to produce a breakthrough.
Spot gold gained 0.2 percent to $1,431.54 an ounce by 1:53 pm EST (1853 GMT). US gold futures for April delivery rose $2.40 an ounce to settle at $1,429.60. "The market is really eager to find out how this whole debt crisis in Europe is settled," said Credit Agricole analyst Robin Bhar. "It's been lingering on for a long, long time."
Concern over eurozone sovereign debt was a major factor driving gold's 30 percent price rise in 2010. It has since extended gains to a record $1,444.40 an ounce set Monday, largely on safe-haven buying linked to unrest in the Middle East region. Some of the world's largest exchange-traded funds have boosted gold holdings more than 340,000 ounces so far this week to over 61 million ounces.
Silver rose for a fourth consecutive session, rising 0.6 percent to $36.20 an ounce on tightness in near-term supplies and continued inflows into ETFs. Platinum eased 0.1 percent at $1,801.24 an ounce, while palladium lost 1.3 percent to $778.72.
Comments
Comments are closed.