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

Gold falls on dollar, safe-haven status supports

Gold falls on dollar, safe-haven status supports
Comment E-mail Print Share
First Published: Mon, Jun 13 2011. 04 21 PM IST
Updated: Mon, Jun 13 2011. 04 21 PM IST
London: Gold fell on Monday as the euro eased against the dollar, but concerns about the euro zone debt crisis sustained investor interest in the precious metal as a safe store of value.
Bullion fell almost 1% on Friday, its biggest one-day decline in a month, due to a rally in the dollar and broad commodities losses.
Spot gold fell $6.55 to $1,524.84 an ounce by 03:10 pm after rising as high as $1,532.56 an ounce, still well below a lifetime high around $1,575 struck in May.
“Currencies remain relatively volatile and will be the driver in the near term for gold and silver. The outlook for the currencies will have a significant bearing on where the next move is,” RBS analyst Daniel Major said.
Gold has been trading range-bound and seems to be finding support on the 20-day moving average of $1,524 for the past three weeks. “A dip below this level may extend gold’s slide,” said ANZ commodity research note.
Safe Haven
“I think it is still looking for sufficient momentum and a catalyst that’s needed for it to break the $1,550 level on a sustained basis,” said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.
“I am still looking for gold to be supported above the $1,500 level. I think we are still seeing safe-haven flows and the Greece debt crisis. These are still factors that will continue to underpin gold.”
The euro edged up against the dollar on Monday on short covering following its slide on European haggling over a second Greek bailout. The cost of insuring peripheral euro zone bonds against default hit record highs on Monday.
“Continued pressure on bond yields is likely to spur fresh investor interest,” Credit Suisse said in a research note.
“The lingering discussion about the fiscal situation across developed economies should additionally promote gold’s role as a store of value,” it said.
Newmont Mining Corp, the world’s No.2 gold producer, sees prices for the precious metal rising to $1,600 this year and above that next year, on growing demand from Asia’s burgeoning middle class.
The bullion market in top consumer India was slow during the monsoon, a slack season for gold demand, but jewellers are expected to replenish stocks ahead of September, when festivals and weddings restart.
Investors will also wait for a batch of US data such as manufacturing activity reports this week for clues on whether the surprisingly weak US employment data for May was an aberration or the start of a trend.
Comment E-mail Print Share
First Published: Mon, Jun 13 2011. 04 21 PM IST
More Topics: Gold | Buliion | Silver | Markets | Commodity |