WebSify
Follow us on
Mail
Print

Gold steadies after 1 percent gain; ETFs at four-year low

Source : REUTERS
Last Updated: Thu, May 09, 2013 04:15 hrs
A saleswoman arranges gold jewellery inside a showroom in Kolkata

Gold held steady on Thursday after gaining more than 1 percent in the previous session, lacking impetus to rise further as investors cut their holdings on bullion exchange-traded funds to their lowest since early 2009.

Bullion prices have been rangebound this month, torn between a pick up in physical demand after prices plunged to a more than 2-year low in mid April and a lack of interest from investors who are shifting their money into equities as Wall Street gains.

Gold was 41 cents higher at $1,472.60 an ounce by 0305 GMT. It has rebounded more than $100 from its April trough, but is still well below the psychological level of $1,500.

"Sentiment is pretty much mixed. People are not quite sure which way we will go. There's selling on ETFs and physical buying. I guess, we are still in range of $1,440 to $1,500," said Yuichi Ikemizu, branch manager for Standard Bank in Tokyo.

"As long as it is in $1,400 (range), I guess there's still very good buying interest."

U.S. gold for June was at $1,472.10 an ounce, down

$1.60. Cash and U.S. gold futures plunged to around $1,321 on April 16, their lowest in over two years, after worries about central bank sales and a drop below $1,500 led to a sell-off that stunned investors, prompting them to slash ETF holdings.

SPDR Gold Trust, the world's largest gold-backed ETF, said its holdings fell 0.60 percent to 1,051.47 tonnes on Wednesday from 1057.79 tonnes on Tuesday.

The physical market was mixed in Asia, with dealers in Singapore noting a slowdown in buying interest and those in Hong Kong reporting a shortage in the supply of gold bars that kept premiums at multi-month highs.

"We suspect that the pace of buying has cooled from the frenzied pace evident last month when gold prices were about $100 an ounce cheaper," said Edward Meir, a metals analyst at futures brokerage INTL FCStone.

"Those sitting on the fence and waiting for cheaper prices may yet have another shot at getting back in."

Wall Street's extended record run and a surge in Asian shares to a near two-year peak is expected to lure investors seeking better returns away from gold, which has shed 12 percent so far this year after rising for the past twelve years.

In the United States, the U.S. Mint will limit dealers' purchases of its "America the Beautiful" five-ounce silver bullion coins when they go on sale next week, reflecting soaring physical demand.

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