Business | Markets

Gold edges up, but range bound

Rising oil prices will lift gold’s status as a hedge against inflation

  • Reuters
  • Published: 14:23 February 11, 2013
  • Gulf News

Singapore: Gold shrugged off a weaker euro to edge up on Monday, with thin trade due to the Lunar New Year break exaggerating movements, while platinum and palladium hovered below their strongest levels in 17 months.

“I don’t think there are many other influences in the market, certainly in the Asian market anyway, beyond currencies right now. So I think it’s very much going to be the case of watch the dollar index,” said Nick Trevethan, senior metals strategist at ANZ in Singapore.

“We could see prices push up a little higher, probably to $1,672.90. And the bottom is probably around $1,665. It’s a very narrow trading range.”

In theory, a stronger US dollar makes bullion more expensive for holders of other currencies, while rising oil prices will lift gold’s status as a hedge against inflation, dealers said.

Gold hit a high of $1,668.91 an ounce and was steady at $1,667.10 by 0245 GMT. Japan, China, Hong Kong, Singapore, South Korea and Taiwan are among the major centres in Asia closed on Monday for holidays.

US gold added $1.00 to $1,667.90 an ounce.

Elsewhere, data from the US Commodity Futures Trading Commission could point to renewed interest in the metal as an inflation-hedge. Speculators raised net longs in gold by 4,845 lots to 86,926 in the week to February 5, the CFTC’s Commitments of Traders report said.

Gold rallied to a record of around $1,920 in September 2011, when a worsening debt crisis in Europe sparked a buying rush.

In other markets, oil and equities dawdled near multi-month highs scaled after robust Chinese trade data last week.

Platinum and palladium ticked lower in directionless trade. Year to date, platinum group metals have outperformed gold and silver on a combination of supply worries and recovering auto demand.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.23 percent to 1326.89 tonnes on Friday from 1329.90 tonnes on Thursday.

Gulf News
Business Editor's choice
Quick Access

  1. Markets

  2. Economy

  3. Property

  4. Aviation

Business Top Stories

  1. Gitex Shopper opens with a myriad of gadgets

  2. Day's deal: Free Android cam with post-paid plan

  3. UAE tenants wait for rental index

  4. Dubai needs to create a middle ground in realty

  5. Demand for sustainable property set to grow