Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday

Gold hits new record but falls back to $1,140

Gold hits new record but falls back to $1,140
Comment E-mail Print Share
First Published: Wed, Nov 18 2009. 11 34 AM IST
Updated: Wed, Nov 18 2009. 11 34 AM IST
Tokyo: Gold prices inched up to touch another record high on Wednesday but then succumbed to profit-taking and fell back to $1,140 per ounce on the view that recent rises had gone too far too fast.
Although technical charts suggest bullion is overbought, market players said the precious metal’s long-term strength is seen intact, with the dollar expected to remain weak and amid worries about inflation and an uncertain economic outlook.
Federal Reserve Ben Bernanke made a rare comment on Monday about the value of the dollar, drawing a link between its current weakness and inflation risks.
Some said buying momentum for gold was likely to slow ahead of next week’s Thanksgiving holiday in the United States, and also now that prices have neared the $1,150 level, a key technical target seen likely to pave the way for $1,200.
“I think we will see the market taking a break with Thanksgiving almost here,” said Kazuhiko Saito, chief analyst at Tokyo’s Fujitomi Co Ltd, adding that it could be next month before another solid rally takes place.
Spot gold was at $1,137.70 per ounce at 10:42am, down 0.3% from the New York notional close of $1,141.50. It earlier touched a record $1,143.95 per ounce.
The dollar index hovered at around 75.26 after striking a 15-month low of 74.679 on Monday.
Gold has pierced record highs on eight of the past 12 sessions, during which it has risen more than 7 percent.
Bullion has gained about 30% in the year to date.
US December gold jumped as high as $1,144.70, a record, on Wednesday after settling up 20 cents at $1,139.40 in New York. It drifted lower to $1,138.30 in late Asian trade.
The precious metal inched up in New York on Tuesday as worries about long-term inflation more than offset a stronger dollar.
In news closely monitored by the market, the International Monetary Fund said it sold two tonnes of gold to the central bank of Mauritius at prevailing market prices on 11 November.
The report follows news early in November that the IMF had sold 200 tonnes of gold to India, a factor that helped drive gold prices to record highs above $1,100.
The focus has now shifted to the remainder of 403.3 tonnes that the IMF has said it plans to sell.
The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust said its holdings stood at 1,113.833 tonnes as of 17 November, unchanged since 13 November.
In news on other precious metals, Johnson Matthey said platinum prices could top recent 14-month highs to hit $1,550 an ounce in the next six months if investment demand adds to a recovery in car sales.
Spot platinum stood at $1,446.50 per ounce, down 0.5% from New York’s notional close of $1,453.
Comment E-mail Print Share
First Published: Wed, Nov 18 2009. 11 34 AM IST
More Topics: Markets | Gold | Metal | Bullion | Commodity |