Gold near 3-month high; eyes $1,300
Singapore, February 13, 2014
Gold was hovering near a three-month high on Thursday, and appeared capable of breaking the $1,300 level on technical momentum and as hopes for a measured tapering of US stimulus offset any negative impact from firmer equities.
Spot gold was little changed at $1,289.56 an ounce by 0355 GMT, not far from a three-month high of $1,295.91 reached on Wednesday.
Gold, considered a safe-haven, often moves in the opposite direction to equities, seen as riskier assets. The metal has snapped out of that in recent days as it pushes towards $1,300, a level last reached on November 8 last year.
"There doesn't seem to be any logic with gold going up when stocks and US Treasury yields are higher," said one Hong Kong-based precious metals trader.
"But I think there is enough technical momentum to carry prices above $1,300 today when New York opens. There is room up to $1,310-$1,315 area."
Asian markets held steady near three-week highs on Thursday, as investors were cautiously optimistic after upbeat trade data from China eased concerns over the global economy and helped take some of the sting off the recent emerging markets turmoil.
Federal Reserve chair Janet Yellen said earlier this week she would not make any abrupt changes to the US central bank's commitment to gradually rein in monetary stimulus, boosting market sentiment.
Investors are also hoping that the recent weak jobs data would prompt the Fed to slow the pace of the draw down of bond purchases.
"In the near-term, a convincing close above the psychological $1,300 level may lend additional support for bullion, while a failure to break this threshold may be seen as inviting for investor profit taking," HSBC said in a note.
"Gold may need a compelling reason to hold onto gains over $1,300 lest profit taking chip away at gains."
Physical demand will likely slow down if prices go above $1,300. Buying from China, the world's biggest gold consumer, has already been falling off since the beginning of this week when trading volumes hit their highest since May. - Reuters