Gold near one-month high as dollar, stocks drop
Singapore, January 14, 2014
Gold steadied near its highest in a month on Tuesday as safe-haven buying increased amid a drop in the dollar and equities, with investors fretting over the US growth outlook after a disappointing jobs report last week.
Friday's nonfarm payrolls showed that US employers added jobs at a much slower pace than expected, sparking fears about the strength of economic recovery.
Markets speculated that the weak report could prompt the Federal Reserve to proceed cautiously in tapering its historic monetary stimulus, prompting equities and the dollar to drop.
Gold has rallied, with some analysts beginning to suggest that gains could continue or at least hold for a little longer.
"The weaker dollar and the jobs data are giving gold a boost. For the moment at least these prices should hold because Chinese buying for the Lunar New Year is also giving support," said Brian Lan, managing director of GoldSilver Central in Singapore.
Spot gold had fallen slightly to $1,252.00 an ounce by 0320 GMT, not too far from a one-month peak of $1,254.80.
Asian shares came under pressure on Tuesday, with Japanese stocks tumbling more than 2 percent as the yen hovered near a four-week high against the dollar.
"If equities stay on the defensive and yields remain low we could see some modest rotational shift out of paper assets and into gold, which could support a push closer to $1,300, but we do not envisage a significant rally above those levels," HSBC analysts said in a note.
HSBC expects a limited rally as investors remain on guard against further tapering through the year. - Reuters