PRECIOUS-Gold firms but gains limited by strong dollar

Mon Nov 5, 2012 1:10pm IST

* Physical buying spree eases after Friday's rush
    * Spot gold to hover above $1,678/oz - technicals
    * Coming up: US ISM non-manufacturing PMI, Oct; 1500 GMT

 (Updates prices)
    By Rujun Shen
    SINGAPORE, Nov 5 (Reuters) - Gold nudged a touch higher on
Monday, paring falls after stronger-than-expected U.S. jobs data
sent gold to a two-month low in the previous session, but a
stronger dollar curbed the rebound.
    U.S. employers stepped up hiring in October and a small
increase in the jobless rate was due to more workers restarting
their job hunts, adding to evidence that the economic recovery
is gaining traction. 
    More monetary stimulus would not be necessary if the economy
can stand up on its own, which would deal a blow to gold, which
rode to near $1,800 an ounce last month on stimulus measures
taken up by central banks. 
    Rampant cash printing by central banks increases gold's
appeal as investors worry about currency debasement and
inflation as a result of quantitative easing.
    "In the short term gold may hover around Friday's low, but
there isn't much room on the downside as easing monetary policy
is still a global trend," said Li Ning, an analyst at Shanghai
CIFCO Futures.
    Spot gold edged up 0.1 percent to $1,678.44 an ounce
by 0727 GMT, recovering from a two-month low of $1,673.94 an
ounce on Friday. 
    U.S. gold gained 0.2 percent to $1,679.
    Technical analysis suggested that spot gold may hover above
a support at $1,678 during the day before breaking this level
and falling more to $1,666, said Reuters market analyst Wang
Tao. 
    
    A stronger dollar weighed on gold's rebound. The greenback
rose to its highest in nearly two months against a basket of
currencies, as investors sought safe haven ahead of Tuesday's
U.S. presidential election. 
    Gold is likely to tread water as investors also closely
watch a key gathering of China's ruling Communist Party which is
expected to usher in a new generation of leaders, as well as a
policy meeting of the European Central Bank later this week.
    Physical gold buyers rushed to the market on Friday during
the sell-off, and the buying spree eased on Monday.
    "There is physical delivery today on Friday's orders," said
a Singapore-based dealer. "People are not in a rush to buy
because there is plenty of supply around. But if prices drop
below $1,650, there will be good demand and supply will tighten
up."
    She added that gold bar premiums in Singapore stood at 80 to
90 cents an ounce above London prices.
    Speculators cut the net length in U.S. gold futures and
options for the third straight week in the week ended Oct. 30,
to 149,853 contracts. Net length in silver, platinum and
palladium also fell, said the U.S. Commodity Futures Trading
Commission.
    Spot silver partly rebounded from a 4.3-percent slide
in the previous session, to gain 0.3 percent to $30.88.
    Striking miners at AngloGold Ashanti were due to
return to work on Sunday at two mines where operations were
suspended this week in a dispute over bonus payments, the
world's third largest bullion producer said. 
    Spot palladium lost 1.5 percent to $600. Spot
platinum was up 0.4 percent to $1,543.25.
    
      Precious metals prices 0727 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1678.44    2.08   +0.12      7.33
  Spot Silver        30.88    0.10   +0.32     11.52
  Spot Platinum    1543.25    6.15   +0.40     10.79
  Spot Palladium    600.00   -9.00   -1.48     -8.05
  COMEX GOLD DEC2  1679.00    3.80   +0.23      7.16        21279
  COMEX SILVER DEC2  30.90    0.04   +0.14     10.69         6063
  Euro/Dollar       1.2834
  Dollar/Yen         80.35
  COMEX gold and silver contracts show the most active months
 
 (Editing by Ed Davies)
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