Gold drifts from 1-month high
Singapore, January 24, 2013
Gold inched down on Thursday, pulling further away from a one-month high hit earlier in the week, as increasing confidence in the global economic recovery dulls bullion's appeal as a safe-haven investment.
Gold has failed to breach key resistance at $1,700 an ounce over the last few days, lacking fresh impetus as a generally improving economic outlook steers investors towards riskier assets.
Growth in China's massive manufacturing sector accelerated to a two-year high in January, the HSBC flash purchasing managers' index (PMI) showed on Thursday, adding to signs of a rebound in the world's second largest economy.
The January 28 expiry of Comex options contributed to the stagnation in prices, as a large open interest on a $1,700
strike kept prices sticky, traders said.
Spot gold had inched down 0.2 percent to $1,682.44 an ounce by 0346 GMT, off a one-month peak of $1,695.76 hit on Tuesday.
US gold lost 0.3 percent to $1,682.50.
Market participants are also waiting for a US Federal Reserve policy meeting next week, which could shed light on the future of its ultra-loose monetary policy, which has been a main
driver of gold prices in the past two years.
"We have the FOMC (Federal Open Market Committee) and non-farm payrolls data, which could shake this market out of its technical trading doldrums," said a Singapore-based trader.
Gold has been moving in a range between roughly $1,680 and $1,695 for the past week, lacking momentum to move either way as investors weigh the continuously easing monetary stance against a slowly improving economy.
Technical analysis suggested that spot gold may fall into a range of $1,665.94-$1,669 an ounce during the day, as a corrective wave cycle that started at the Jan.4 low of $1,625.79 has completed, said Reuters market analyst Wang Tao.
"As long as we don't see any trend for tightening monetary policy, gold is unlikely to fall much," said a trader based in the eastern Chinese province of Zhejiang.
"But current levels are too high to buy. I bought some at $1,650 and probably will sell when prices rise to $1,750." - Reuters