Gold rises as dollar steadies
Friday, 5 June 2009
TOKYO, June 4 (Reuters): Gold prices rose Thursday as investors bought back the metal after a round of profit-taking the previous day, when the US currency climbed and oil prices tumbled.
Both spot gold and futures fell about 2 per cent on Wednesday as commodities retreated broadly led by heavy losses in oil, the dollar's sharp recovery amid weaker US economic indicators and steep losses on Wall Street.
Investors returned to dollar assets as worries about the outlook for the economy and stock market declines dampened their appetite for risk. On Thursday the dollar was steady against the yen and euro.
"We are getting a bit of a bounce after the large sell-off yesterday, plus the dollar is a bit weaker after the rally on Wednesday," said Adrian Koh, an analyst at Phillip Futures.
Spot gold rose 0.4 per cent to $966.30 per ounce from New York's notional close of $962.15 per ounce. It earlier fell as low as $961.20. Gold last climbed above $1,000 on Feb. 20.
US gold futures for August delivery GCQ9 rose 0.2 per cent to $967.70 per ounce from Wednesday's $965.60 on the Comex division of the New York Mercantile Exchange. It settled down 1.9 per cent Wednesday, the biggest one-day per centage fall for the August contract since April 6.
Prices are hovering just below $1,000, where selling incentives for customers counter funds buying to hit options triggers that would lift prices above the key four-digit level.
Inflation worries and the dollar's weakness have supported a bullish view on gold, while bears said short-term funds were driving up the market so any gains would not last long. "I still think it's possible (to hit $1,000), but the markets are currently at an important crossroads and any further selling pressures could change that," Koh said, noting that if the market can hold above $960, which was the low for Wednesday's sell-off, then the $1,000 level was still realistic.
Both spot gold and futures fell about 2 per cent on Wednesday as commodities retreated broadly led by heavy losses in oil, the dollar's sharp recovery amid weaker US economic indicators and steep losses on Wall Street.
Investors returned to dollar assets as worries about the outlook for the economy and stock market declines dampened their appetite for risk. On Thursday the dollar was steady against the yen and euro.
"We are getting a bit of a bounce after the large sell-off yesterday, plus the dollar is a bit weaker after the rally on Wednesday," said Adrian Koh, an analyst at Phillip Futures.
Spot gold rose 0.4 per cent to $966.30 per ounce from New York's notional close of $962.15 per ounce. It earlier fell as low as $961.20. Gold last climbed above $1,000 on Feb. 20.
US gold futures for August delivery GCQ9 rose 0.2 per cent to $967.70 per ounce from Wednesday's $965.60 on the Comex division of the New York Mercantile Exchange. It settled down 1.9 per cent Wednesday, the biggest one-day per centage fall for the August contract since April 6.
Prices are hovering just below $1,000, where selling incentives for customers counter funds buying to hit options triggers that would lift prices above the key four-digit level.
Inflation worries and the dollar's weakness have supported a bullish view on gold, while bears said short-term funds were driving up the market so any gains would not last long. "I still think it's possible (to hit $1,000), but the markets are currently at an important crossroads and any further selling pressures could change that," Koh said, noting that if the market can hold above $960, which was the low for Wednesday's sell-off, then the $1,000 level was still realistic.