Gold holds gains after US fiscal deal
Singapore, January 3, 2013
Gold was mostly unchanged on Thursday, holding on to gains from the previous session when a last-minute deal to avert a US fiscal disaster drove prices to a two-week top, although caution remained over upcoming tough budget negotiations.
Commodities made a strong start to the New Year by hitting multi-week highs on Wednesday after the US Congress passed a bill that raises taxes on wealthy individuals and families, sparing middle- and low-income earners.
But it left unresolved another sticky issue involving $109 billion in planned military and domestic spending cuts, promising more political showdowns on the budget in coming months.
Gold typically benefits from economic uncertainties given its safe-haven status, but considering many investors have both equities and gold in their portfolios, bullion has also been closely watching movements in stock markets that have rallied on the US fiscal deal.
Gold hit a high around $1,689 an ounce and was at $1,686.35 by 0350 GMT, unchanged from Wednesday. It hit a two-week high above $1,690 in the previous session. Gold ended up around 7 per cent in 2012 - the 12th straight year of gains, making it one of the longest bull runs ever for a commodity.
"Precious metals are currently tracking equities, however they are stuck within the next trading range. For gold, it will need to breach $1,695 before it can actually have another upward trend to break above $1,700," said Brian Lan, managing director of GoldSilver Central in Singapore.
"For silver, it has to break $31.60."
US gold for February fell $1.70 an ounce to $1,687.10.
Premiums for gold bars were steady in Singapore at $1.10 to $1.20 an ounce to the spot London prices as supply had yet to recover after the Christmas and New Year holidays. Buyers from top consumer India were on the sidelines.
India's central bank has asked that volume and value restrictions be placed on gold imports by banks and agencies, while the finance minister said he was looking at further curbs on gold imports to help rein in a current account gap that touched an all-time high in the July-September quarter.
"People in India, especially the jewellers, will be making noise because the move may affect them. But of course, if you keep importing gold, you will need a lot of dollars. This restriction has happened in Vietnam and Thailand," a dealer in Singapore said.
"But the good thing about Thailand is that it both imports and exports gold. So, there is a balance."
India imported a record 967 tonnes of gold in 2011.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.07 per cent to 1349.92 tonnes on Wednesday from 1350.82 tonnes on Monday. – Reuters
More INTERNATIONAL NEWS Stories
- China premier warns on economic slowdown
- Gunmen fire on army bus in Cairo, 1 killed
- Lost jet 'may have flown for four hours'
- Gold up as Ukraine, China prompt safe-haven bids
- Search finds no sign of lost plane at suspect spot
- Missing jet may have strayed to Andaman
- Gold hits near 6-month high
- 2 killed in Manhattan building blast
- Cameron pushes for travel bans on Russian MPs
- Indian coastguards join Malaysia jet search
- Confusion as search for lost jet spreads
- Military denies lost plane's flight to Malacca
- Investors monitoring Pimco after internal strife
- N Korea tanker ‘leaves Libya rebel port carrying oil’
- Malaysia plane incident not terror related: Interpol
- Crimea closes air space to commercial flights
- Missing Malaysian plane last seen At Malacca Strait
- Stolen passport holder on missing plane is Iranian
- China deploys 10 satellites to search for Malaysia jet
- Libya says halts tanker outside port; rebels deny it
- Libya orders military force to 'liberate' ports
- Big bananas: Chiquita, Fyffes merge
- Radar sweeps, dozens of aircraft, but no sign of plane
- N Korea tanker loads oil at Libya rebel port
- Gold drops as US growth optimism weighs
- Merkel raps Putin; Russia tightens grip on Crimea
- World 'at sea' over missing Malaysian jetliner
- Passports requiring probe were on Malaysia flight
- 40 killed in Yemen as Houthi fighters near capital
- Vietnam finds object in sea; search on