Gold inches up on firm euro
Gold inched up in thin trade on Tuesday as the euro held firm against the U.S. dollar, but the metal was stuck in a familiar range as it struggled to clear a recent high above $1,130 an ounce.
Silver, platinum and palladium lost strength after rallying in the previous session on news that China’s annual economic growth will reach 12 percent this quarter following strong industrial output growth last month.
Spot gold was at $1,110.35 an ounce by 0034 GMT, up $2.15 from New York’s notional close on Monday, when it rose as high as $1,114.45, its strongest in nearly two weeks.
Gold hit an intraday high of $1,110.85 on Tuesday before light profit taking kicked in. It hovered below a 100-day moving average and was 2 percent below a 1-week high at $1,132.80 hit on March 17.
“I think sentiment is really neutral. It’s stuck in a range of $1,080 and $1,130,” said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.
“Gold is watching the dollar. Everybody is in a holiday mood. Nobody wants to commit too much ahead of the Easter weekend.”
The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,129.823 tonnes as of March 29, up 5.176 tonnes from the previous business day.
The euro inched up on Tuesday as investors pared some of their record short positions ahead of the quarter-end and with sentiment also boosted by Greece’s ability to raise money from the debt market.
Despite recent gains, analysts saw limited upside potential for the single currency because of the euro zone’s debt problems, while weak economic growth meant the European Central Bank was in no rush to hike interest rates.
Gold had benefitted from safe-haven buying related to Greece’s debt problems but profit taking as well as frequent rebounds in the dollar erased some of the gains.
U.S. gold futures for April delivery hardly moved at $1,110.2 an ounce, having also risen to its highest in nearly two weeks on Monday on firm oil and better U.S. economic data that raised hopes of improving demand for industrial commodities.
U.S. consumers tapped their savings in February to keep spending on an upward path for a fifth-straight month, implying that consumption may be strong enough in the coming months to keep a recovery going.
There was hardly any activity in the physical market but dealers expected main consumer India to resume purchases ahead of the wedding season in April. Consumers from Indonesia and Thailand were on the sidelines after recent purchases.
“Thailand is basically waiting for the delivery of the gold bars they have bought earlier. There’s nothing much from India and I don’t think they are in a rush to buy,” said a dealer in Singapore.
Oil was steady above $82 on Tuesday after hitting the highest level in almost two weeks a day earlier on optimism about the global economic recovery.
Source: Reuters