Spot gold hovered around $890 on Tuesday, holding on to the previous day's gains, as the market pondered its direction in the absence of fresh incentives. The precious metal ended higher on Monday as the dollar softened against the euro and as oil prices bounced back from earlier lows.
Spot gold was at $891.80/893.00 an ounce at 0432 GMT versus $891.25/892.65 late in New York on Monday, after trading between $889.25 and 892.30. Koji Suzuki, a senior manager at SBI Futures Co Ltd, attributed the slow trade to a US Senate committee hearing on commodity markets. The committee is trying to curb speculation in commodities, an issue which has come into focus again as oil hit a record high above $135 a barrel in May.
"I don't think speculators are moving much in New York," Suzuki said. The mood has also influenced trading in London, he added. "It's sort of created a vacuum in the market," Suzuki said. He said that although a soft dollar would continue to draw gold buying by investors, the precious metal was unlikely to move much for the time being.
Bullion prices are currently trading at a level that is down more than 13 percent from the all-time high of $1,030.80 marked in mid-March. Although they are off a low of $845 marked on May 2, they have failed to settle above $930 for the past two weeks.
In the US gold futures market, the Commodity Futures Trading Commission (CFTC) said in its latest report that non-commercial net long positions rose to 191,512 lots in the week to May 27, higher than 182,119 lots a week earlier.
Gold futures for August delivery on the COMEX division of the New York Mercantile Exchange fell to $895.50 an ounce in electronic trading, compared with the previous day's settlement of $897.00. The benchmark April contract on the Tokyo Commodity Exchange rose 13 yen per gram to 3,017 yen. Platinum fell to $1,998.50/2,008.50 an ounce from $2,000/2,020 in New York. Palladium was at $432/437 an ounce versus $431/439. Silver was mostly flat at $16.80/16.86 an ounce versus $16.81/16.87 late in New York.