Gold gains for second day as dollar weakens
Singapore, August 8, 2013
Gold reversed early losses on Thursday as the U.S. dollar languished at seven-week lows, with traders covering short positions in the precious metal.
Gold is now up for a second straight session, having fallen to a three-week low early on Wednesday on fears of a stimulus wind down by the U.S. Federal Reserve from next month.
"The buying today is due to short covering since not much is happening to strengthen the U.S. dollar," said a Sydney-based precious metals trader.
"Investors are selling their long U.S. dollar and buying other currencies and gold."
Spot gold had gained 0.4 percent to $1,292.64 an ounce by 0700 GMT. U.S. gold rose about $6 to $1,291.60.
The dollar slid to a seven-week low as uncertainty over when the Federal Reserve might begin reducing its stimulus weighed on prospects for bigger yield advantages.
Traders said the short-covering in gold could push prices through the $1,300-mark.
Gold has lost nearly a quarter of its value this year after strong economic data prompted talk the Fed could scale back its support for the economy.
Cleveland Fed President Sandra Pianalto said on Wednesday that the U.S central bank could begin reducing the pace of its bond-buying stimulus if recent improvement in the U.S. job market persists.
Other key Fed policy makers, including Chicago Fed President Charles Evans and Dallas Fed President Richard Fisher, said earlier this week that stimulus could be cut as early as September, depending on economic data.
The slide in gold prices earlier this week stirred up some buying interest in China, which is set to overtake India this year as the world's top gold consumer.
Shanghai futures rose on Thursday after a two-day fall.
"Physical demand from the Far East continued to provide support for gold," HSBC analysts said. "Despite the pick-up in physical buying, downside risks to bullion persist as the near-term momentum appears to be negative for gold." – Reuters
More INTERNATIONAL NEWS Stories
- 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
- Ukraine mobilises after Putin's 'declaration of war'
- Oil jumps $2 over Ukraine tension
- US threatens to isolate Russia for Ukraine aggression
- Ukraine mobilises for war, calls up reserves