PRECIOUS-Gold posts weekly gain on US fiscal crisis concern

Sat Nov 10, 2012 3:08am IST

Related Topics

Stocks

   

* Steadier equities, strong US consumer sentiment support
    * Gold hits technical resistance near 50-day moving average
    * China data shows economic recovery, room for stimulus seen
    * Coming up: White House talk to avert fiscal cliff next
week


    By Frank Tang
    NEW YORK, Nov 9 (Reuters) - Gold traded flat on Friday, but
notched its largest weekly gain since late August as a looming
U.S. fiscal crisis led to purchases of the metal as a hedge
against economic uncertainty.
    The metal has gained over 3 percent this week as investors
turned their focus from the election to the U.S. "fiscal cliff",
a combination of government spending cuts and tax increases due
to be implemented under existing law in early 2013.
    Such measures could send the U.S. economy back into
recession, economists say.
    "Gold is again acting as the haven as ... the fiscal cliff
looms, and euro zone woes increase. More gold buyers are
initiating positions going forward," said George Gero, vice
president at RBC Capital Markets.
    The metal erased early gains on Friday after U.S. President
Barack Obama's insisted that tax hike for the very rich must be
part of the bargain to prevent a fiscal crisis, as some
investors worried such tax increase would hurt the overall
economy. Obama also invited Congressional leaders to start
negotiating to avert the crisis and said he was "open to
compromise". 
    Spot gold was up 0.1 percent at $1,731.09 an ounce by
4:05 p.m. EST (2105 GMT), after touching a three-week peak of
$1,738.66.
    On charts, gold appeared to run into strong technical
resistance just below its 50-day moving average near $1,740.
    Gold's 3.2 percent gain this week is its biggest weekly rise
in 11 weeks since the last week of August.
    U.S. COMEX gold futures for December settled up $4.90
at $1,730.90 an ounce, with trading volume about 10 percent
below its 250-day average, preliminary Reuters data showed. 
    Better U.S. consumer sentiment and a steadier performance on
Wall Street after sharp declines in stock prices earlier this
week also boosted gold buying. 
    Hopes of stronger Chinese demand for gold after data showed
economic recovery and mild inflation, coupled with signs of
better Indian physical demand, provided additional support. 
    Silver gained 0.7 percent to $32.55 an ounce.
    
    CHINESE, INDIAN DEMAND EYED
    China's economy strode further along the road of recovery
from its slowest growth in three years, data for October
showed. 
    Friday's data, key barometers of domestic activity and
output from China's export-oriented factory sector, offered
further evidence that policy loosening had worked and had left
the authorities with room to do more if necessary.
    China's gold demand is expected to grow by 1 percent this
year to a record of around 860 tonnes, Philip Klapwijk, the
global head of metals at consultancy Thomson Reuters GFMS, said
this week, with jewellery and investment sales rising.
    Gold importers in India, the world's biggest buyer of
bullion, are expected to make purchases ahead of the Hindu
festivals of Dhanteras and Diwali, major gold-buying events,
next week. Analysts said physical demand usually rises during
the Indian wedding season, which continues until December.
    Among platinum group metals, platinum was up 0.9
percent at $1,554.75 an ounce. Spot palladium fell 1.4
percent to $603.47 an ounce.
 4:05 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1730.90   4.90   0.3  1726.90 1739.40  138,798
 US Silver DEC  32.599  0.359   1.1   32.065  32.785   44,591
 US Plat JAN   1559.40  16.90   1.1  1544.20 1572.90    9,643
 US Pall DEC    611.05  -3.30  -0.5   605.00  618.50    3,260
                                                               
 Gold          1731.09   1.10   0.1  1727.43 1738.66         
 Silver         32.550  0.230   0.7   32.100  32.760
 Platinum      1554.75  14.00   0.9  1545.00 1566.99
 Palladium      603.47  -8.50  -1.4   608.27  616.50
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        161,799   151,450   177,179     15.98   -0.32
 US Silver       54,550    41,900    55,864     24.28   -1.18
 US Platinum     10,126     9,175     9,427     18.84   -0.45
 US Palladium     3,650     3,379     4,484
FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Public Health

REUTERS SHOWCASE

Cost Cutting

Cost Cutting

PM Narendra Modi boots officials out of the first class cabin  Full Article 

Airtel Profit Jumps

Airtel Profit Jumps

Bharti Q2 net profit more than doubles   Full Article 

Leisure Riding

Leisure Riding

Harley-Davidson woos affluent young Indians with bike culture  Full Article 

Maruti Earnings

Maruti Earnings

Maruti Suzuki net profit up 29 percent, beats estimates.  Full Article 

ICICI Results

ICICI Results

ICICI Bank Q2 profit up 15 percent, beats estimates.  Full Article 

Moody's on India

Moody's on India

Moody's welcomes India's policy steps, but wants to see more.  Full Article 

End Of QE

End Of QE

U.S. Fed ends bond buying, exhibits confidence in U.S. recovery.  Full Article 

Cook Comes Out

Cook Comes Out

Apple's Cook: "I'm proud to be gay"  Full Article 

Refining Margins

Refining Margins

BPCL aims to double refining margins with refinery expansion.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage