Gold heading for third weekly gain
Singapore, July 26, 2013
Gold edged higher on Friday, staying on track for its third straight weekly gain, helped by a weaker dollar and hopes of a prolonged period of easy monetary policy.
Bullion has gained nearly 10 percent in three weeks – its biggest such winning streak in nearly two years - after the Federal Reserve assured financial markets it would only start phasing out its stimulus when it was sure the U.S. economy was strong enough to stand on its own.
Spot gold had climbed 0.1 percent to $1,334.90 an ounce by 0652 GMT, nearly $160 more than the three-year low hit on June 28.
"The mood towards gold has definitely changed in recent weeks as the market thinks most of the bad news is priced into gold already," said Danny Laidler, head of ETF Securities' Australia and New Zealand business.
"I wouldn't say people are bullish gold but they are definitely less bearish," said Laidler, adding that outflows from the firm's gold-backed exchange traded fund (ETF) have slowed.
Gold has still lost a fifth of its value this year as investors feared a strong recovery in the United States might prompt the Fed to scale back its $85 billion monthly bond purchases. Outflows from gold ETFs have also weighed on prices.
Holdings of SPDR Gold Trust, the world's largest gold ETF, fell 0.3 percent to 927.36 tonnes on Thursday – their lowest in four years.
"The fundamentals for buying gold are still there – loose monetary policy, concerns over the Middle East and Europe, and (economic) data from the U.S. and China not being as positive as expected," Laidler said.
Physical demand in China has been key to supporting gold prices this year amid the exit from ETFs.
Data from the Shanghai Gold Exchange shows that physical deliveries have totalled 1,198.4 tonnes so far this year. The exchange delivered 1,140 tonnes in all of 2012.
China's gold demand could hit a record 1,000 tonnes this year, the World Gold Council said on Thursday, which means it would overtake India as the world's biggest bullion consumer.
India is seeing a slowdown in demand as the government tightens rules to curb gold imports and tame a record trade deficit. Premiums in India jumped to $20 an ounce over London spot prices on Thursday due to short supplies. – Reuters
More INTERNATIONAL NEWS Stories
- 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
- Iran nuclear deal 'being implemented as planned'
- Global factory growth stumbles as demand falters
- Obama warns of 'fallout' for Israel if peace effort fails