Thursday 24 July 2014
 
»
 
»
Story

Gold steady below record after Fed decision

Singapore, September 22, 2010

Gold was steady on Wednesday, after hitting a fourth consecutive record in the previous session, with the US Federal Reserve moving closer to providing more support to the economy.

The Fed on Tuesday laid the groundwork for further stimulus measures and expressed stronger concerns about low inflation. However, it made no policy shift at the end of the one-day meeting.

Spot gold edged up 0.2 per cent to $1,288.70 an ounce by 0330 GMT, after touching a new record of $1,290.70 on Tuesday. US gold futures rose 1.3 per cent to $1,290.2 an ounce.

On the physical market, premiums in Hong Kong and Singapore were little changed despite high prices.

'There is not much demand, and there is not much scrap selling either,' said Ronald Leung, a physical dealer at Lee Cheong Gold Dealers, adding that the Fed's move closer to pump more money into the economy makes investors want to hold on to the bullion as a hedge against future inflation.

'If the interest rate turned around, it would probably prompt people to dump gold and everything.'

Premiums in Singapore also remained around 50 to 80 cents, a Singapore-based dealer said.

'I reckon the customers are recovering from the aftershock of $20 jump. Again it's a mixed market -- in Thailand we see both physical demand and scrap selling, while Indonesian clients have gone hiding this morning and nothing is seen from India so far,' said the dealer.

Spot gold is poised to rise to $1,305 per ounce, given a strong bullish momentum, according to a Reuters market analyst for commodities and energy technicals.

Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell to 1,304.168 tonnes by Sept 21 from 1,304.472 tonnes on Sept 20.

Holdings in the world's largest silver-backed exchange-traded fund, the iShares Silver Trust, jumped 127.81 tonnes, its biggest gain in nearly 10 months, to 9,509.55 tonnes.

Spot palladium rose nearly 2 per cent to $537 an ounce. The price hit a near 4-month high of $563 on Sept 15.

'PGM (platinum group metals) market is following gold market at this moment. As gold is at historical highs, same type of speculation money is flowing into the PGM market and prices move up sharply,' said a Tokyo-based dealer, adding there was not much action on the physical market.

The weakness in the dollar has helped support bullion. The dollar fell to a 7-week low against a basket of currencies, after the Fed meeting intensified speculation it would take more measures to bolster the economy.

The dollar fell to its weakest on the yen since Japan intervened last week. Bank of Japan Governor Masaaki Shirakawa said the central bank will continue to provide ample liquidity to markets, including funds supplied through currency intervention. – Reuters




Tags: Gold | Singapore | Federal Reserve | dealers | Palladium | US Futures |

More INTERNATIONAL BUSINESS Stories

calendarCalendar of Events

Ads

Buy high quality China wholesale Health & Beauty , Electronics, Sports & Outdoors , Computers, Video Games, Toys & Hobbies Cell Phones, Automobiles and other wholesale products directly from reliable Chinese wholesalers or Factories on DHgate.com