Gold headed for best week in 18 months
Singapore, April 26, 2013
Gold was headed for its biggest weekly gain in one-and-a-half years after rising more than one per cent on Friday as a mid-month plunge in prices triggered bargain-hunting and a surge in physical buying across Asia.
Bullion still attracted buying even though the price had rebounded more than $100 since falling to a two-year trough of around $1,321 last week, with dealers reporting a shortage in gold bars, coins, nuggets and other products.
Gold was up $7.30 an ounce at $1,474.29 by 0408 GMT, off an initial high of $1,484.81, its strongest since April 15. It was poised to be up more than 5 per cent for the week. The metal posted its biggest daily rise since June last year on Thursday, but was still down 12 per cent this year.
"There's panic buying. Everybody is buying gold. It still has a chance to go up to $1,500 and maybe a bit more. $1,525 is then the big barrier," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
"It's not easy to go back down to $1,400 as long as the physical market is still tight. The thing is that there are no immediate stocks."
Gold was also supported by prospects of more central bank buying after Russia and Turkey raised their gold reserves in March, the International Monetary Fund said on Wednesday, increasing their holdings ahead of a spectacular plunge in prices this month.
U.S. gold futures for June delivery rose as high as $1,484.80 an ounce.
Premiums for gold bars in Hong Kong jumped to at their highest level since October 2011 this week, at up to $3 an ounce to spot London prices, partly because of an increase in buying interest from China, the world's second-largest consumer after India.
Premiums in Singapore stayed at their highest since October 2008 at $3 an ounce to the spot London prices on demand from Indonesia, Thailand and India.
"You must be prepared to pay up. I would think premiums will remain high in the short-term because of a shortage in immediate stocks. You have to wait for three days if you want to get gold now," said a dealer in Singapore.
"The Indonesians have told me they should start selling at above $1,450, but they are actually buying some this morning, although the amount is not great. Local demand in Thailand is still good. I also see a pick up in demand for silver," the dealer added.
Silver rose as high as $24.82 an ounce, its highest since April 15. Prices sank to $22.04 last week, the weakest since October 2010.
But a daily drop in exchange-traded funds' holdings suggested that gold investors were still licking their wounds after bullion's historic fall last week, which shocked ardent gold investors and bulls.
Holdings of the largest gold-backed exchange-traded fund, the SPDR Gold Trust, dipped 0.25 per cent on Thursday from Wednesday. The current holdings are at multi-year lows.
In other markets, Asian shares rose on Friday, tracking global equities higher after upbeat U.S. labour market data, while the dollar eased slightly on currency markets that were otherwise watching for signals coming from a Bank of Japan policy review.-Reuters
Tags: Gold |
More INTERNATIONAL NEWS Stories
- Syrian journalist killed covering fighting
- Malaysian jet may have turned back before vanishing
- No sign of missing plane; Malaysia probes false passports
- Two Europeans not on board 'missing' Malaysian jet
- China draws red line on North Korea
- Saudi sentences three to death for 2003 bombing
- First bitcoin machine opens in UK
- US sanctions will boomerang, warns Russia
- China plans $50bn bank to fund projects
- Sony to sell Tokyo 'birthplace'
- Obama orders sanctions over Russian moves
- Crimea parliament votes to join Russia
- Arab League to be revamped
- 'Upskirting' is legal: Massachusetts court
- Singapore probes 'unnatural' death of bitcoin trader
- Onus on world powers for Syria war crimes: UN
- US, Russia set for talks on Ukraine crisis
- Brent oil drops below $109
- Services outshine manufacturing, pushing up jobs
- Bitcoin bank shut down after hacker attack
- India to kick off world's biggest poll on April 7
- China signals focus on reforms
- Hundreds ready for bitcoin exchange class action
- Space taxi, Jupiter mission in Obama budget
- Putin: Use of force last resort in Ukraine
- Powers to boost Lebanese military, economy
- Egypt bans Hamas activities in Egypt
- Putin ends army exercise, markets rally
- Russia has violated international law: Obama
- Russian markets hit as Putin tightens grip on Crimea