Gold regains strength after drop, platinum bounces

Gold regains strength after drop, platinum bounces
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First Published: Mon, Mar 10 2008. 09 30 AM IST
Updated: Mon, Mar 10 2008. 09 30 AM IST
Singapore: Gold bounced on Monday on bargain hunting after a failure to break through the $1,000 an ounce barrier spurred selling last week, while speculators bought platinum on dips.
Expectations of further interest rate cuts in the United States and record high crude oil that raised fears of inflation were likely to sustain investors’ interest in gold, which may find good support around $960 an ounce, dealers said. Gold roared to an historical high of $991.90 an ounce on 6 March before funds cashed in to boost liquidity. The metal has gained nearly 20% in 2008 on the top of a 32% rise last year.
Gold rose to $975.10/975.90 an ounce from $972.60/973.40 late in New York on Friday, after it swung between a low of $969.40 and a high at $988.00.
“I think these early preconditions that have been supportive for the gold price are likely to remain in place in coming weeks, particularly the anticipation that the Fed will further lower US interest rates,” said David Moore, an analyst at Commonwealth Bank of Australia in Sydney.
Gold futures for April delivery on the COMEX division of the New York Mercantile Exchange added $2.4 an ounce to $976.6 but were off a record high of $995.2 an ounce hit on 5 March.
The dollar dipped back towards a record low against the euro and an eight-year low against the yen after surprisingly weak US jobs data heightened fears the US economy had fallen into recession.
The US central bank has slashed its federal funds target rate by 2.25 percentage points since September to its current 3% level and is widely expected to cut it again at its next policy-setting session on 18 March.
“I guess there’s some short covering and also a bit of physical buying. For the time being, $968 and $970 will be the temporary support levels. The upside is capped at $993 and $980 is still a good resistance,” said a dealer in Hong Kong.
“There’s some technical rebound in platinum but the market is pretty thin after Tokyo futures hit limit down,” he said.
Spot platinum firmed to $2,065/2,075 an ounce from $2,020/2,030 an ounce in New York on bargain hunting after a dip to $2,020, matching Friday’s 3-week low.
Platinum was moving away from a record high of $2,290 an ounce on 4 March on news that mines in South Africa, the world’s top platinum producer, would get more electricity supply.
The benchmark platinum futures contract for February 2009 delivery on the Tokyo Commodity Exchange fell by its daily 300-yen limit to 6,707 yen a gram on Monday due to a surge in the yen.
Silver edged up to $20.20/20.25 an ounce from $20.11/20.16 an ounce. Spot palladium rose to $495/500 an ounce from $485/490 an ounce.
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First Published: Mon, Mar 10 2008. 09 30 AM IST
More Topics: Markets | Precious | Gold | Platinum | Silver |