Gold adds to strong monthly gains
Singapore, July 31, 2013
Gold gained on Wednesday as the metal's strong performance in July prompted some month-end buying from funds, as traders awaited further clarity from the US Federal Reserve on the timing of any pull-back in stimulus measures.
Bullion, up 8 per cent this month, was also helped by some technical buying triggered after prices rose to $1,330 an ounce, breaking through tight trading ranges seen over the last two sessions.
"We see some speculative buying on gold and silver," said a Hong Kong-based precious metals trader. "Stops were triggered once gold hit $1,330."
"There is also month-end buying from funds as they window dress their portfolios."
Spot gold rose 0.4 per cent to $1,332.31 an ounce by 0309 GMT, hovering near its five-week high of $1,347.69 touched last week. US gold gained about $9 to $1,332.50.
Silver also benefited from speculative buying, gaining close to 1 per cent.
The July gain - bullion's biggest monthly increase since January 2012 - was prompted by the Fed's assurance that it would only start phasing out its monetary stimulus when it was sure the US economy was strong enough to stand on its own.
The Fed will release a statement Wednesday afternoon after its two-day monthly policy meeting. Traders will be looking for clues as to when the US central bank will start tapering its $85 billion monthly bond purchases.
US GDP data and a private jobs report will also be released on Wednesday, which will help gauge the strength of the economy.
Spot gold is expected to rise to $1,361 per ounce, as it has completed a consolidation and resumed its uptrend, Reuters technicals analyst Wang Tao said.
Gold premiums in Shanghai have eased from last week, indicating a slowdown in demand. Shanghai gold was about $16 more than London spot prices, down from over $25 last week.
In India, imports of gold have halted since July 22 when the central bank announced new rules tying imports to exports, sending premiums for scarce stocks soaring.
Traders were quoting a premium of up to $45 an ounce over London spot prices.
Premiums in other parts of Asia were mostly stable as dealers navigate through a seasonally quiet period without any acute shortage of the metal. - Reuters