London: Gold eased on 17 April on profit taking, but stayed near its maximum in 11 months and might aim at the next target of $700 (Rs29,400) an ounce on a weaker dollar outlook and firm oil prices, dealers said.
Spot gold was at $688.80/689.30 an ounce by 1355 GMT, compared with $690.90/691.40 in New York late on 16 April, when prices surged to an 11-month high of $691.
“We are gradually going to go back upwards. And actually that’s what you want, because you don’t want to have a boom and then a bust afterwards. I think we can go up towards the $700 mark this quarter,” said Michael Widmer, director of metals research at Calyon Corporate and Investment Bank.
“What markets are looking for is having lower inflation rates, which could provide incentive to the US Federal Reserve to lower interest rates. And that would mean there would be a downward pressure on the dollar. Gold would certainly benefit from that,” Widmer added.
The dollar fell to a new two-year low versus the euro after a report showed core US consumer prices rose by less than expected in March. Investment funds have been moving into gold in the current quarter after seeing it climb more than 5% since the start of the month, dealers said.