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Gold steadies below all-time high, US data eyed

Gold steadies below all-time high, US data eyed
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First Published: Fri, Mar 07 2008. 11 04 AM IST
Updated: Fri, Mar 07 2008. 11 04 AM IST
Singapore: Gold paused for breath on Friday after a tumble from a record high the previous day, with investors eyeing US jobs data due later in the day and a possible test of the $1,000 an ounce level.
Gold firmed to $981.40/982.25 an ounce from $976.20/976.95 late in New York, where it hit a record $991.90 on dollar weakness before profit taking erased much of the gains.
Bargain hunters and jewellers were buying on dips but some investors were on the sidelines ahead of the February US jobs data, which is forecast to show a rise in jobs after a surprising loss in January. “There might be some selling pressure because the market is slightly overstreched. Small speculators are still trying to pick a top, hedge funds are still practically quite long,” said William Kwan, a dealer at Phillip Futures in Singapore.
Gold has gained nearly 20% in 2008 as funds, speculators and investors buy the precious metal on expectations of further interest rate cuts in the United States and record-high oil, which elevates its safe-haven appeal.
“Looking ahead, we can break $1,000 but it might not be so sustainable. I do foresee a so-called sharp reversal next week but most probably we’ll see $1,000,” Kwan said.
The dollar dropped to an all-time low against a trade-weighted basket of major currencies, with the dollar index falling as low as 72.849.
The Fed is expected to cut its benchmark overnight lending rate by at least 50 basis points later this month. The fed funds target rate has been lowered by 2.25 percentage points to 3.0% since mid-September.
Silver edged up but stayed below a 27-year high, platinum bounced after being hit by news that main producer South Africa will let mines increase power consumption, while palladium rebounded from a 1-week low.
Greg Wilkins, chief executive of Barrick Gold Corp, the world’s largest gold producer, said on CNBC TVthe company is not going hedge its production with gold pricesalmost nudging $1,000 as it expects prices to climb further.
Gold futures for April delivery on the COMEX division of the New York Mercantile Exchange added $4.0 an ounce to $981.1 an ounce - off its record high of $995.2 hit on 5 March.
Silver edged up to $20.22/20.27 an ounce from $20.15/20.18 an ounce, having reached a 27-year peak of $21.20 an ounce on Thursday.
Spot platinum rose to $2,172/2,179 an ounce from $2,170/2,180 an ounce late in New York.
South Africa said it will let mines increase power consumption from 90 to 95% of normal because the country’s power crisis has stabilised.
Spot palladium firmed to $514/519 an ounce from $513/516 an ounce.
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First Published: Fri, Mar 07 2008. 11 04 AM IST
More Topics: Markets | Precious | Gold | Fed | Platinum |