Gold sheds gains, Tokyo futures off 5-month low

Gold sheds gains, Tokyo futures off 5-month low
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First Published: Mon, Aug 20 2007. 09 41 AM IST
Updated: Mon, Aug 20 2007. 09 41 AM IST
Lewa Pardomuan / Reuters
Singapore: Gold dipped on profit taking on Monday, 20 August, as investors digested a surprise move by the US Federal Reserve to lower discount rates, while Tokyo futures regained their footing after falling by their daily limit last week.
Other precious metals were firmer, with silver hovering above last week’s 10-month low.
“For the week ahead, I suspect we’ll see the gold price hold mostly above $645. On the topside, I’d say, probably $667,” said David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney.
Spot gold dropped to $654.10/654.90 an ounce from $655.30/655.90 late in New York on Friday, when it gained nearly $5 as global financial markets rebounded after the Fed cut its discount rate by a half-percentage point to 5.75%.
The Fed left its benchmark federal funds rate steady at 5.25%.
“I imagine people are still absorbing the implications of the Fed action on Friday night, which would have provided some support for the gold prices, certainly for investor confidence,” said Moore.
Gold has rebounded nearly 2% since falling to a 7-week low of $641.10 an ounce on last Thursday, when bullion investors sold their holdings following sell-off in stock markets on worries about credit market troubles. Fears of a credit squeeze have kept equity markets around the world under pressure since the end of July, and those worries have started to have a significant impact on commodity markets.
Most active June 2008 gold futures on the Tokyo Commodity Exchange ended the morning session 41 yen a gram higher at 2,430 yen, having fallen by the daily 120-yen limit to 2,389 yen on Friday on concerns about global equities, credit markets and the strength of the yen.
Platinum rose to $1,240/1,245 an ounce from $1,230.40/1,237.40 in New York.
Silver edged up to $11.73/11.77 an ounce from $11.69/12.72 an ounce. It had tumbled to its lowest since October 2006 at 11.03 an ounce last Thursday.
Palladium rose to $327/332 an ounce from $325.75/329.75 late in New York.
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First Published: Mon, Aug 20 2007. 09 41 AM IST
More Topics: Markets | Precious metals | gold | Silver | platinum |