Gold climbs but stays below $1,400
Singapore, September 5, 2013
Gold edged higher on Thursday as investors looked for bargains after a sharp drop in the previous session, but it stayed below the key level of $1,400 an ounce as upbeat US data dented its appeal as an alternative investment.
Robust US auto sales numbers reinforced expectations the US Federal Reserve would start to cut back its stimulus later this month. The central bank's three quantitative easing schemes have buoyed prices of bullion and other commodities.
Gold had risen $1.79 to $1,392.63 an ounce by 0336 GMT, after falling 1.5 per cent on Wednesday. It rallied to its highest in more than three months around $1,433 in late August on safe-having buying as the United States and its allies looked set to launch military strikes on Syria.
"If we break through the critical support level of $1,380, prices will go all the way down to at least $1,353. For now, they are many issues surrounding gold which are offsetting each other," said Joyce Liu, an investment analyst at Phillip Futures in Singapore.
"I think the most prominent issue is the US Federal Reserve meeting. The economy seems to be expanding - that provides the ground for them to taper the stimulus."
US gold was up $2.90 at $1,392.90 an ounce.
Gold buyers lined up to restart imports on Wednesday as the customs department clarified new rules, putting the world's biggest consumer back in the market after a six-week gap and threatening government efforts to underpin the rupee.
But there have not yet been any fresh enquiries from India, even though the rupee has bounced from all time lows, said physical dealers.
Premiums for gold bars in Hong Kong edged down to $2 an ounce to spot London prices from $2.50 in late August.
"The thing is that the import tax is still high in India, so I think that is dampening their buying interest. Also gold prices are still high at close to $1,400," said a dealer in Hong Kong.
Gold is one of the biggest items in a record current account deficit that has helped push the rupee to an all-time low. New Delhi has raised the import duty on gold to an all-time high of 10 per cent.
Elsewhere, stocks in Asia edged up on Thursday following a positive lead from Wall Street. - 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