Gold goes up above $1,120

Gold prices inched up above $1,120 on Wednesday although a slightly firmer dollar versus the euro capped gains, while platinum’s rally, which lifted prices to their highest in over a year in the previous session, lost steam.

Spot gold was at $1,124.15 an ounce by 0220 GMT, up 0.5 percent compared to New York’s notional close of $1,118.10.

U.S. gold futures for February delivery were at $1,123.20, also up about 0.4 percent.

Wong Eng Soon, investment analyst at Phillip Futures Pte Ltd, said he remained positive about gold’s outlook for now.

“I’m quite optimistic on gold because … although there are expectations that the Fed will be raising rates, the wording from the Fed’s statement hasn’t been changed yet, meaning that they’ll still keep rates low (for the time being),” he said.

“I think gold will be quite well supported.”

Higher rates typically boost the dollar and pressure gold, which is often used as an alternative to the U.S. currency.

U.S. December employment data due out on Friday, which is expected to shape the outlook for a rate hike from the Federal Reserve, remained a focus in the market.

In the currency market, the ADP’s employment report and ISM non-manufacturing index for December were also attracting attention, along with the minutes from the Fed’s last policy meeting, all due later in the day.

The dollar remained on the defensive against the yen on Wednesday after falling sharply the previous day as traders locked in gains on the greenback’s rally over the past month ahead of U.S. jobs data later this week.

The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,128.745 tonnes as of January 5, unchanged from the previous business day.

The world’s largest silver-backed exchange-traded fund, the iShares Silver Trust, said its silver holdings stood at 9,488.81 tonnes as of January 5, down 0.04 percent from the previous business day.

Platinum, which had jumped to its highest price in well over a year on Tuesday, lost some of its upward momentum on Wednesday, although sister metal palladium continued to make gains.

Anticipation of industrial demand spurred by strong December sales by Ford Motor Co had helped buying of platinum and palladium, which are used as auto catalysts to clean car exhaust fumes.

Strong economic data and any other indication suggesting a robust economic recovery is likely to spur buying of both metals again, traders said.

Platinum was at $1,528.00 per ounce, down a touch from the New York notional close of $1,528.50, after earlier falling to a low of $1,513.50.

It hit a 16-month high of $1,535.50 on Tuesday.

Palladium was at $419.50, up 0.4 percent from New York’s notional close. It rose to $424 in the previous session, its strong level since July 2008.

Source: Reuters