Gold eyes record peak; economy, Iran support
Singapore, June 28, 2010
Gold ticked higher on Monday, trading less than $10 shy of last week's record high, underpinned by worries about the global economy after the G20 summit and US comments that Iran has fissile material for two atomic bombs.
Gold saw support from fears about the durability and pace of the global economic recovery, unallayed after the weekend's G20 summit in Canada, and comments from the head of the CIA that Iran may have enough fissile material to make two atomic weapons, and could build the first in two years.
"The underlying safe haven concerns have supported prices -- the economic environment, Europe's fiscal outlook and the longer term prospects for inflation," said David Moore, commodities strategist at Commonwealth Bank of Australia.
"The G20 hasn't had an significant impact on markets, and while concerns about Iran's nuclear capacity are nothing new, there seems to be additional clarity."
Spot gold rose $2.45 to $1,255.85 an ounce by 0420 GMT after a steady performance last week during which bullion struck a record high above $1,264.
Gold could rise further to surpass the June 21 record high at $1,264.90 per ounce to touch $1,270, as bullish momentum is strong, according to Reuters technical analyst Wang Tao.
He noted the bulls were taking control with prices in an ascending channel from a $1,224.30 low struck last Wednesday and sharp rises and mild falls.
US gold futures for August delivery rose 70 cents to $1,256.90 an ounce. The world's largest gold-backed exchange-traded fund, SPDR Gold Trust said its holdings remained unchanged at at an all-time high at 1,316.177 tonnes.
US lawmakers hammered out a historic overhaul of financial regulations, handing President Barack Obama a major domestic policy victory.
"The US regulations are pretty worrying. That's something that we will need to look at more closely," a commodities trading source in Singapore said. "So far people are taking a wait see attitude and it's hard to assess the impact on prices." - Reuters