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Gold edges up as dollar eases from 6-month peak

Singapore, March 4, 2013

Gold inched up on Monday, bouncing off a one-week low marked the session before as the dollar eased from a more than a six-month high hit in the previous session on the back of upbeat US data.

The $85 billion automatic spending cuts in US government programmes, known as the "sequester", kicked off on Friday in the absence of a deal among lawmakers. Investors will be watching for its impact on the economy.

FUNDAMENTALS

* Spot gold had risen 0.3 per cent to $1,580.19 an ounce by 0043 GMT, after hitting a one-week low of $1,564.44 in the previous session.

* US gold was up nearly half a per cent at $1,579.90.

* President Barack Obama formally ordered broad cuts in US government spending on Friday night after he and congressional Republicans failed to reach a deal to avert automatic reductions that could dampen economic growth and curb military readiness.

* But vigorous manufacturing data, together with strong auto sales and a rise in consumer sentiment in February, suggested a pickup in economic growth, offsetting concerns about the impact of the spending cuts.

* Hedge funds and money managers increased their net long gold futures and options positions in the week to February 26 from a more than four-year low hit a week earlier, Commodity Futures Trading Commission data showed on Friday.

* In contrast, sales of American Eagle gold coins rose sharply year-on-year in February, and silver coin sales posted their strongest performance for the month since 1986, highlighting strong safe-haven buying amid economic uncertainty.

* SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, said its holdings inched down on March 1 to 1,253.885 tonnes in its ninth consecutive session of decline.

MARKET NEWS

* US stocks advanced modestly on Friday, leaving the S&P 500 with slight gains in a volatile week as strong economic data overshadowed growth concerns in China and Europe and let investors discount the impact of expected US government spending cuts. – Reuters




Tags: US | Gold | Singapore | Dollar |

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