Gold headed for biggest weekly drop in four weeks

SINGAPORE Fri Nov 30, 2012 2:14pm IST

An woman shops at an Indian jewellery stall at the Jewellery Arabia 2012, the biggest jewellery exhibition in Manama, Bahrain, October 18, 2012. REUTERS/Hamad I Mohammed/Files

An woman shops at an Indian jewellery stall at the Jewellery Arabia 2012, the biggest jewellery exhibition in Manama, Bahrain, October 18, 2012.

Credit: Reuters/Hamad I Mohammed/Files

Related Topics

Priyanka Gandhi Vadra, daughter of Congress party chief Sonia Gandhi, adjusts her flower garlands as she campaigns for her mother during an election meeting at Rae Bareli in Uttar Pradesh April 22, 2014. REUTERS/Pawan Kumar

Election 2014

More than 814 million people — a number larger than the population of Europe — are eligible to vote in the world’s biggest democratic exercise.  Full Coverage 

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)

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

RAINFALL THIS YEAR

REUTERS SHOWCASE

Election 2014

Election 2014

Thousands mob Modi as election race starts in Varanasi.  Full Article 

Monsoon Forecast

Monsoon Forecast

Met office rules out surplus monsoon in 2014.  Full Article 

Facebook's Performance

Facebook's Performance

Facebook Q1 revenue grows 72 percent on rising mobile ads.  Full Article 

Earnings Season

Earnings Season

Bharti Infratel Q4 net profit jumps 64 percent.  Full Article 

Solar Dispute

Solar Dispute

Green groups urge U.S. to drop solar trade case against India.  Full Article 

Oil Imports

Oil Imports

India to make May-July oil payments to Iran - sources.  Full Article 

Rice Exports

Rice Exports

India may cede top rice exporter spot under Southeast Asian price onslaught.  Full Article 

Reuters India Mobile

Reuters India Mobile

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