Gold at 1-month high on economic recovery hopes
Singapore, January 23, 2013
Gold held near a one-month high on Wednesday but faces a strong resistance at $1,700 an ounce, as it struggles to attract fresh buying from investors who opted for riskier assets against the backdrop of a global economic recovery.
The US debt ceiling talks, seen as a potential threat to the recovery of the world's top economy, have shown positive signs, as the House of Representatives plans to pass a bill on a nearly four-month extension of the borrowing limit.
A rosier global economic outlook based on recent upbeat data from the United States, China and even Europe, has triggered rallies in equities and precious metals with industrial applications, including silver, platinum and palladium, putting gold in the shadow.
"It looks like the debt ceiling problem is solved for the time being, and investors would pour money into the stock market rather than gold," said Ronald Leung, a gold dealer at Lee Cheong Gold Dealers in Hong Kong.
The Standard & Poor's 500 index hit a five-year high in the previous session, up 4.6 percent so far this month, outperforming the gain of 1 percent in gold - the worst performer in the precious metals complex.
Spot gold was little changed at $1,692.60 an ounce by 0328 GMT. It hit a one-month high of $1,695.76 in the previous session after the Bank of Japan announced bold stimulus measures in an attempt to revive the anaemic economy.
US gold traded nearly flat at $1,692.60.
Technical analysis suggested spot gold may rise to $1,706 an ounce during the day, as an upward wave starting from the January 11 low of $1,653.44 has not been completed, said Reuters market analyst Wang Tao.
SILVER SNAPS SEVEN-DAY RISE
Spot silver inched down 0.2 per cent to $32.12 an ounce, snapping a seven-day winning streak that matched a similar run in August 2011.
The robust inflow in silver-backed exchange-traded funds has helped spot silver prices rally more than 6 per cent so far this year, as the metal's exposure to a quickened pace in economic growth attracted investors.
Holdings of iShares Silver Trust, the world's largest silver ETF, stood at 10,689 tonnes on January 22, up 604.9 tonnes, or nearly 6 per cent from the end of 2012.
In comparison, SPDR Gold Trust, the world's top gold ETF, saw an outflow of nearly 15 tonnes so far this year.
Analysts polled by Reuters expected silver to recover from last year's decline before picking up next year. Gold could see average record highs this year and the next, but its bull run may be topping out. – Reuters
More INTERNATIONAL NEWS Stories
- Missing jet may have strayed to Andaman
- Gold hits near 6-month high
- 2 killed in Manhattan building blast
- Cameron pushes for travel bans on Russian MPs
- Indian coastguards join Malaysia jet search
- Confusion as search for lost jet spreads
- Military denies lost plane's flight to Malacca
- Investors monitoring Pimco after internal strife
- N Korea tanker ‘leaves Libya rebel port carrying oil’
- Malaysia plane incident not terror related: Interpol
- Crimea closes air space to commercial flights
- Missing Malaysian plane last seen At Malacca Strait
- Stolen passport holder on missing plane is Iranian
- China deploys 10 satellites to search for Malaysia jet
- Libya says halts tanker outside port; rebels deny it
- Libya orders military force to 'liberate' ports
- Big bananas: Chiquita, Fyffes merge
- Radar sweeps, dozens of aircraft, but no sign of plane
- N Korea tanker loads oil at Libya rebel port
- Gold drops as US growth optimism weighs
- Merkel raps Putin; Russia tightens grip on Crimea
- World 'at sea' over missing Malaysian jetliner
- Passports requiring probe were on Malaysia flight
- 40 killed in Yemen as Houthi fighters near capital
- Vietnam finds object in sea; search on
- $5bn poll spend to boost India economy
- Libya authorises use of force against Korean tanker
- Ukraine PM says he will go to US to discuss crisis
- Syrian journalist killed covering fighting
- Malaysian jet may have turned back before vanishing