Web Sify
Follow us on
Mail
Print

Gold rises on bargain hunting, snaps 3-day drop

Source : REUTERS
Last Updated: Wed, Sep 25, 2013 04:20 hrs
Customer looks in mirror after wearing gold earring inside jewellery shop in Hyderabad

Gold rose on Tuesday as physical buying at lower prices and technical support helped bullion snap a three-day losing streak.

Earlier in the session, the precious metal was down after U.S. economic data showed slowing growth in U.S. home prices in July and a dip in consumer confidence this month.

Gold later turned higher on bargain hunting and technical buying after bullion rebounded from a session low near $1,300 an ounce.

"Buyers have been stepping in each time gold holds support down near $1,300 an ounce, which looks like a short-term bottom for now," said Michael Matousek, head trader at U.S. Global Investors, which has about $1.2 billion in mutual-fund assets.

"Investors are now adjusting positions against the uncertainty on Fed tapering," he said.

Spot gold was up 0.2 percent at $1,323.70 an ounce by 3:13 p.m. EDT (1913 GMT).

U.S. gold futures for December delivery settled down $10.70 an ounce at $1,316.30, with trading volume in line with its 30-day average, preliminary Reuters data showed.

New York Fed President William Dudley said on Monday that the U.S. central bank could still reduce its support for the economy later this year, while St. Louis Fed President James Bullard said on Friday that stimulus could be scaled back in October, depending on economic data.

"Gold is falling because markets are now expecting an improvement in the next U.S. labour market next week, which could lead to the Fed tightening, as the Fed's decision is data dependent," Quantitative Commodity Research owner Peter Fertig said.

WEAK PHYSICAL DEMAND

Gold premiums across Asia remained weak due to subdued physical demand ahead of what is typically a strong buying period for top consumers India and China as they head into wedding and festival seasons.

Moves by India to cut gold imports as it wrestles with its ballooning current account deficit have been keeping buyers at bay.

In gold mining news, Barrick Gold Corp is in talks on further asset sales, with the focus on divesting smaller, higher-cost mines, Chief Executive Jamie Sokalsky told Reuters on Tuesday.

As a gauge of investor interest, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.1 percent on Monday from Friday, having shed another tonne last week. That has brought its total outflow for the year to 440 tonnes.

In other precious metals, silver gained 0.6 percent to $21.72 an ounce. Platinum rose 0.6 percent to $1,423.49 an ounce and palladium climbed 0.9 percent to $718.75 an ounce.


blog comments powered by Disqus
most popular on facebook
talking point on sify finance