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Gold at 21-year peak in Japan on lunar new year demand

Gold at 21-year peak in Japan on lunar new year demand
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First Published: Wed, Feb 14 2007. 01 09 AM IST
Updated: Wed, Feb 14 2007. 01 09 AM IST
Gold futures opened higher on Tuesday on bullish sentiment from the Japanese markets, where the metal touched a 21-year high, dealers and analysts said.
A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date. “Expect sideways movement with a bullish bias,” said Anand Rathi Commodities in its daily report.
The brokerage foresaw resistance at Rs9,550 to Rs9,660 per 10gm for the April contract on the Multi Commodity Exchange of India Ltd (MCX).
“Buy around Rs9,480 for a target of Rs9,560 and Rs9,600,” it added.
The April MCX contract had an open interest of 9,240 lots, up from 9,152 lots the previous day. Volume on Monday was 26 tonnes. Gold traded near an eight-month high as some investors speculated that supply may not be enough to keep up with the demand in Asia as the lunar new year holiday approaches.
Mine production is down so far this year in South Africa, the US, Australia, Canada and Indonesia, managing director of Sydney-based Commodity Broking Services Jonathan Barratt said.
Demand from manufacturers preparing for the holidays in Asia, including the Chinese new year, can push gold prices even higher, according to the Denver-based Newmont Mining Corp.
“We just haven’t got enough supply to meet demand coming into the Chinese new year,” Barratt said.
Gold for immediate delivery rose as much as $1.70 (Rs74.8), or 0.3%, to $668.55 an ounce (28.3gm). The metal traded at $666.45 an ounce at 4m in Singapore. Bullion closed at $666.85 on 9 February, the highest daily close since May last year.
At the Tokyo Commodity Exchange on 9 February, gold for December delivery rose 1.5% to 2,594 yen ($664) a gram, the highest since September 1985.
Gold for April delivery on the Comex division of the New York Mercantile Exchange gained as much as $1.80 to $673.50. It traded at $670.70 an ounce at 4:07 p.m. in Singapore.
Gold production this year has fallen 9% in South Africa, 5% in the US, 10% in Australia, 16% in Canada and 34% in Indonesia, Barratt said.
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First Published: Wed, Feb 14 2007. 01 09 AM IST
More Topics: Money Matters | Commodities |