HomeBusinessGold ticks up, but remains near two-month low

Gold ticks up, but remains near two-month low

-

SINGAPORE — Gold regained some strength yesterday on bargain hunting, but still held near its weakest level in two months as a firmer United States dollar and rallies in equities undermined the metal’s appeal as an alternative investment.

Tension between Russia and Ukraine as well as violence in the Middle East have failed to stir up demand from investors, although some jewellers purchased bullion after prices dropped below $1 300/oz.

Cash gold added 0,22% to $1 279,11/oz, still not far above a two-month low of $1 273,06 hit on August 21.

“We are seeing some physical demand but it’s not enough to make the market higher. I think the US dollar is a bit too strong.

$1 240-$1 250 should be very good support levels,” Standard Bank branch manager Yuichi Ikemizu said.

“China bought too much last year, and also this year, gold (price) is a bit higher. I think if we go down lower, we will see some demand.”

Spot gold could rebound moderately to a resistance at $1 283 before testing a support at $1 273/oz, as indicated by its wave pattern and a Fibonacci projection analysis, Reuters market analyst Wang Tao said.

China’s net gold imports in July from main conduit Hong Kong tumbled to their lowest since June 2011 because the country already has ample supply from shipments in earlier months, while jewellers there are waiting for lower prices.

The country’s crackdown on corruption could have also sapped demand in China, which overtook India as the biggest consumer of the precious metal last year with imports topping 1 000 tonnes.

US gold was steady at $1 280,10/oz.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0,37% to 797,09 tonnes on Monday from 800,08 tonnes on Friday.

“We’ve been selling some gold but a bank holiday in London yesterday slows us a little,” a physical trader in Singapore, said.

“There are bargain hunters around, but I guess the physical market is still quiet.”

Premiums for gold bars in Hong Kong rose to 70c-$1.10 to the spot London prices, higher than the 50c-$1 quoted late last week. In Singapore, premiums were steady at 80c-$1/oz to spot London prices.

– Reuters

Recent Posts

Stories you will enjoy

Recommended reading