Gold eases after hitting one-week high
Singapore, March 26, 2012
Gold prices hit a one-week high on Monday before paring gains to trade near the previous closing price, with investors closely watching the oil and currency markets for trading cues.
Bullion prices posted the biggest one-day rise so far this month on Friday, reflecting higher oil prices and a sharp fall in the dollar as a result of disappointing US housing market data.
Spot gold was little changed at $1,663.71 an ounce by 0335 GMT, after rising more than 1 percent last Friday and posting its first weekly gain after three straight weeks of decline. US gold barely changed at $1,663.60.
A short-squeeze pushed prices to $1,669.26 in the early hours, but the pressure eased after the Shanghai Gold Exchange opened and the discount in Shanghai prices prompted some selling on the London market, traders said.
In the short term gold may remain under pressure from a brighter US economic recovery, high real interest rates and sluggish physical demand, they said.
"There is no rush to buy gold," said Ronald Leung, a dealer at Lee Cheong Gold Dealers in Hong Kong. "We are seeing slower economic growth accompanied by easing inflation in China, which dampens the interest in buying gold."
Prices below $1,650 may attract some buyers, albeit on a small scale, he said. Money managers in US gold futures and options cut their bullish bets for a third straight week to the weakest level in two months as bullion prices tumbled after a strong run of US economic data triggered fund selling. - Reuters