Gold bounces off 6-month low
Singapore, February 18, 2013
Gold rebounded from a six-month low on Monday as bargain hunters resurfaced and jewellers in China returned to the physical market after the Lunar New Year holiday, but a firm US dollar was likely to limit the upside.
Gold has been under pressure from technical selling and gains in the US currency after the euro slipped from a 15-month high struck in early February on renewed worries about the health of the euro zone economy.
Gold rose $5.18 an ounce to $1,614.24 by 0333 GMT after falling to around $1,598 on Friday, its weakest since August. Friday's loss marked bullion's biggest one-day drop since December.
In Hong Kong, premiums for gold bars rose to as high as $1.70 an ounce to the spot London prices from $1.50 last week, reflecting a surge in buying interest from jewellers, said
Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong. But he doubted whether the buying interest would last.
"The strong dollar is the major point. Sentiment is not bullish for the time being, even though we see there's tension in North Korea," said Leung, referring to a lack of safe-haven buying normally associated with geopolitical tensions.
Leung saw support for the metal at $1,600, which if breached could take it down to $1,580.
Hedge funds and some big speculators slashed their bullish bets on US commodities, taking aim particularly at gold which has lost some of its lustre this year, trade data released on Friday showed.
US gold for April delivery was at $1,614.80 an ounce, up $5.30.
The euro was little changed at $1.3351, having found good support near $1.3310 on Friday. The low also represented the 38.2 percent retracement level of its November-February rally, and a weaker euro makes dollar-priced gold more expensive. - Reuters