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Gold ticks higher, but euro zone fears fade

Gold ticks higher, but euro zone fears fade
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First Published: Fri, Dec 03 2010. 08 31 AM IST
Updated: Fri, Dec 03 2010. 08 31 AM IST
Singapore: Gold gained on Friday to hold near its strongest in almost three-week as bargain hunting helped the metal defy a rebound in the euro, waning Europe debt concerns and upbeat US data.
The European Central Bank resisted pressure on Thursday to commit to a major bond-buying programme to contain the euro zone debt crisis, but traders said the ECB had been quietly buying bonds anyway.
Spot gold rose $6.05 an ounce to $1,390.80 an ounce by 08:30 am. It had jumped to its highest since 12 November around $1,398 on Thursday before falling back. Bullion was below a lifetime high around $1,424 struck in early November.
“We can say there are some bargain hunters at the lower end. There’s not too much liquidity in the market and a little bit of buying moves up gold,” said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.
“I don’t see many jewellery makers around these days. The price is too high. It’s towards the year-end and most of the orders have already been filled,” said Leung, adding that gold could find resistance around $1,400.
US gold futures for February added $2.2 to $1,391.5 an ounce. The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust , said its holdings rose to 1,298.447 tonnes by 2 December from 1,293.891 tonnes on 1 December. The holdings hit a record at 1,320.436 tonnes on 29 June.
Spot gold will rise to a projected target at $1,403 per ounce as the current upward wave “c” has not completed. A Fibonacci projection points to $1,403, the 100 percent level, which may exert a strong resistance to prevent a further rebound, according to Wang Tao, who is a Reuters market analyst for commodities and energy technicals.
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First Published: Fri, Dec 03 2010. 08 31 AM IST
More Topics: Gold | Bullion | Market | Spot gold | Trading |