Gold headed for biggest weekly drop in four weeks
SINGAPORE (Reuters) - Gold edged up on Friday, but prices were on track for their biggest weekly drop since the start of the month with an uncertainty about crucial U.S. talks to avert a fiscal crisis continuing to hit sentiment.
While gold has recovered from a 1-1/2-week low of $1,705.64 an ounce hit on Wednesday, it has been unable to break a strong resistance at $1,730 an ounce in a market roiled by conflicting comments from Washington about the U.S. budget negotiations.
Top Republican lawmaker John Boehner said on Thursday that the talks had made little progress, after expressing optimism about reaching a deal with the White House just a day earlier.
If the parties fail to reach an agreement, $600 billion in tax hikes and spending cuts - dubbed as the "fiscal cliff" - will automatically kick off in early January, threatening to push the world's top economy into recession.
"Gold is back in its old $1,700-$1,730 range," said Chen Min, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen, referring to a range in which gold had traded earlier this month.
"On the macro side, the market sees very little direction, while the 'fiscal cliff' talk poses much uncertainty and risk."
Spot gold inched up 0.3 percent to $1,729.55 an ounce by 0739 GMT, headed for a 1.3 percent weekly drop but a 0.5 percent monthly gain.
U.S. gold was up 0.1 percent at $1,729.70.
Technical analysis suggested signals were mixed for spot gold, as it was not clear that a rebound from Wednesday's low had been completed, Reuters market analyst Wang Tao said.
Holdings of SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, stood at a record high of 1,347.018 tonnes, up nearly 11 tonnes in its fourth consecutive month of rise.
PALLADIUM HEADED FOR FIFTH WEEK OF GAINS
Spot palladium rose 0.6 percent to $686, on course for a fifth week of rise and a monthly gain of more than 14 percent, its strongest since December, 2010.
Concerns about supply and technical buying helped send palladium to a 2-1/2-month high of $689 on Thursday.
"It might be a trade of choice for 2013," said a Hong Kong-based trader. "People don't want to miss it and are pressured to jump in now."
Norilsk Nickel, the world's largest producer of palladium and nickel, expects the palladium market to remain in a deficit in the next several years largely due to a near depletion of Russian state supplies.
In other precious metals, spot silver inched up 0.2 percent to $34.27, on course for a monthly gain of more than 6 percent.
Silver prices could revisit record highs next year, but any gains will depend heavily on a rally in gold fuelling investment as silver struggles to overcome a soft outlook for supply and demand, metals consultancy GFMS said on Thursday.
Spot platinum was headed for a rise of more than 3 percent in November.
In other news, Shanghai Gold Exchange said it will start a trial run of over-the-counter gold trading on the China Foreign Exchange Trading System on December 3, allowing banks to trade amongst themselves and in large volumes.
(Editing by Himani Sarkar)
- Tweet this
- Share this
- Digg this
- India's Mars mission a step closer to success with engine test
- Apple sells more than 10 million new iPhones in first three days |
- PM Modi to get rock star reception in New York
- India withdraws pharma pricing regulator's power to cap non-essential drug prices
- Modi to observe strict fast during maiden trip to U.S.
India has withdrawn the drug pricing authority's powers that allowed it to fix the prices of medicines not deemed essential, after its decision to impose price caps on more than 100 drugs in July triggered industry protests. Article
India has no plans to increase food handouts - Food Minister Ram Vilas Paswan. Full Article