Gold advances as dollar declines
Wednesday, 2 September 2009
SINGAPORE, Sept. 1 (Bloomberg): Gold advanced as the dollar declined and Asian stocks rebounded after China's manufacturing expanded at the fastest pace in 16 months.
Bullion recovered from the biggest loss in a week as the Dollar Index, a six-currency gauge of the dollar's value, weakened. JPMorgan Securities Inc. said the currency may slide 6 per cent toward 87 yen if it falls below support clustered around the July low of 91.74 yen.
"What is happening to the dollar is driving gold prices higher," said Hwang Il Doo, a senior trader with KEB Futures Co. in Seoul. "Still, a recovery in stocks appears fragile after a recent bull run which may limit any price gain in gold."
Gold for immediate delivery rose 0.3 per cent to $954.21 an ounce at 1:23 p.m. in Singapore. The metal is up 8.2 per cent this year. The MSCI Asia Pacific index of regional shares rose 0.7 per cent after falling as much as 0.4 per cent. The dollar index fell 0.1 per cent, trading near the lowest in 11 months.
China's official Purchasing Managers' Index rose to a seasonally adjusted 54 from 53.3 in July, the Federation of Logistics and Purchasing said in an e-mailed statement today in Beijing. A PMI released by HSBC Holdings Plc also climbed.
"You need some bullish factors, not so much on the dollar but also on interest rates," said Ng Cheng Thye, director with Standard Merchant Bank Ltd. in Singapore. "When the recovery is in full steam, people will be concerned about inflation, then gold can penetrate to a higher level."
The ratio of speculative net-long positions to short positions for the week ended Aug. 25 was nine to one, the highest level in six years, according to a data provided by Commerzbank AG. Net-long positions rose to 182,982 contracts, it said.
"Should profit taking occur, the gold price may come under considerable pressure," Eugen Weinberg, an analyst with Commerzbank, wrote in a note yesterday.
Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged for a fourth day at 1,061.83 metric tons yesterday, according to figures on the company's Web site.
Among other precious metals for immediate delivery, silver rose 0.2 per cent at $14.95 an ounce, platinum rose 0.9 per cent to $1,249.40 an ounce and palladium was little changed at $291.45.
Bullion recovered from the biggest loss in a week as the Dollar Index, a six-currency gauge of the dollar's value, weakened. JPMorgan Securities Inc. said the currency may slide 6 per cent toward 87 yen if it falls below support clustered around the July low of 91.74 yen.
"What is happening to the dollar is driving gold prices higher," said Hwang Il Doo, a senior trader with KEB Futures Co. in Seoul. "Still, a recovery in stocks appears fragile after a recent bull run which may limit any price gain in gold."
Gold for immediate delivery rose 0.3 per cent to $954.21 an ounce at 1:23 p.m. in Singapore. The metal is up 8.2 per cent this year. The MSCI Asia Pacific index of regional shares rose 0.7 per cent after falling as much as 0.4 per cent. The dollar index fell 0.1 per cent, trading near the lowest in 11 months.
China's official Purchasing Managers' Index rose to a seasonally adjusted 54 from 53.3 in July, the Federation of Logistics and Purchasing said in an e-mailed statement today in Beijing. A PMI released by HSBC Holdings Plc also climbed.
"You need some bullish factors, not so much on the dollar but also on interest rates," said Ng Cheng Thye, director with Standard Merchant Bank Ltd. in Singapore. "When the recovery is in full steam, people will be concerned about inflation, then gold can penetrate to a higher level."
The ratio of speculative net-long positions to short positions for the week ended Aug. 25 was nine to one, the highest level in six years, according to a data provided by Commerzbank AG. Net-long positions rose to 182,982 contracts, it said.
"Should profit taking occur, the gold price may come under considerable pressure," Eugen Weinberg, an analyst with Commerzbank, wrote in a note yesterday.
Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged for a fourth day at 1,061.83 metric tons yesterday, according to figures on the company's Web site.
Among other precious metals for immediate delivery, silver rose 0.2 per cent at $14.95 an ounce, platinum rose 0.9 per cent to $1,249.40 an ounce and palladium was little changed at $291.45.