Gold set for best week in two months
Singapore, October 18, 2013
Gold was trading near one-week highs on Friday and headed for its best weekly gain in two months on hopes that uncertainties in Washington would delay Federal Reserve stimulus tapering after US lawmakers reached only a temporary budget deal.
US Congress reached a last-minute agreement this week to increase its borrowing capacity till early next year, averting a historical debt default, and end a 16-day long shutdown.
Gold fell about 4 percent during the US government shutdown, but jumped 3 percent on Thursday after the dollar dropped to eight-month lows and a Chinese rating agency downgraded the US sovereign rating.
"It is largely due to expectations in the market, when gold prices were dropping for a few days, that the downside was limited," said Songwut Apirakkhit, managing director of Globlex Holding Management in Bangkok.
"Even though it was a second-tier rating agency like Dagong, gold gained as the dollar (was) sold off."
Prices were also supported on Thursday by two separate bursts of unusually heavy buy orders that lifted prices by $40 in minutes. This marks the fifth time in less than two weeks the benchmark US Comex gold futures contract for December delivery posted sudden, often unexplained, intraday sharp price swings.
Spot gold largely held previous session's gains on Friday, easing 0.1 percent to $1,317.64 an ounce by 0327 GMT and recording a 3.5 percent gain for the week. - Reuters