Gold heads for biggest three-week gain
London, August 20, 2010
Gold rose on Friday, holding near a 1-½ month high hit the previous day as worries about a deepening US economic slowdown escalated and helped push up holdings in the ETF for the third consecutive day.
The precious metal, heading for its biggest 3-week gain since mid-May, is taking cues from US economic data as investors dumped equities and fled for the safety of US
Treasuries and bullion.
Gold rose $2.05 to $1,232.15 an ounce by 0325 GMT, having rallied to as high as $1,237.15 on Thursday after new US jobless claims hit a nine-month high last week, and mid-Atlantic manufacturing slumped in August for the first time in more than a year.
'I think if you see a potential downside, that would be profit taking. Next week, I think again it depends on the data that we are seeing,' said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.
'But I would think that it's still an uptrend that I would be calling,' said Ling, who pegged resistance at $1,240. US gold futures for December delivery fell $1.6 to $1,233.8 an ounce after rising as high as $1,239.50 on Thursday -- its strongest since July 1.
Cash gold and US futures powered to a record in June on worries the debt crisis in Europe was spreading and the US economy was slowing.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings rose to 1,299.468 tonnes by August 19 from 1,295.516 tonnes on August 18. The holdings hit a record at 1,320.436 tonnes on June 29.
Asian stocks slipped on Friday and the yen threatened to hit 15-year highs after the US heightened worries about slackening growth in the world's largest economy.
Poor economic figures revived fears the United States may be sliding back into recession, or a 'double dip', and tipped investors' towards less risky havens such as gold, the yen and US and Japanese government bonds. - Reuters