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Gold slides from early highs on IMF plan to sell 400t
Gold slid yesterday as early buying ran out of steam amid concerns over a plan by the International Monetary Fund (IMF) to sell around 400 tonnes of gold.
- Reuters
- Published: 00:28 April 10, 2008
Singapore: Gold slid yesterday as early buying ran out of steam amid concerns over a plan by the International Monetary Fund (IMF) to sell around 400 tonnes of gold.
Investors were also looking forward to central bank meetings later this week that may offer direction to currencies and precious metals. Other precious metals were also off their peaks in tandem with the fall in gold.
As of 0621 GMT, spot gold was at $911/$911.90 per ounce, down from $913.10/$913.90 late in New York on Tuesday, when it fell more than one per cent as speculators booked profits and reacted to news of the IMF's planned sale.
"Concerns about IMF sales are giving psychological pressure to the market, limiting the topside of gold," said Shuji Sugata, manager at Mitsubishi Corp Futures and Securities in Tokyo.
"The market is also reluctant to buy gold actively on price gains given the recent recovery in the dollar," Sugata said.
The IMF is the world's third-largest gold holder after the US and Germany, with 3,217.3 tonnes in stock. It wants to sell 403.3 tonnes and use the profits to invest in government and corporate bonds, and possibly equities.
The benchmark February gold contract on the Tokyo Commodity Exchange stood at 3,021 yen per gram, down 25 yen or 0.8 per cent from Tuesday's close of 3,046 yen.
Selling pressure
Tokyo traders said TOCOM gold was put under technical selling pressure as the yen firmed slightly against the dollar.
Spot gold was expected to be supported as investment funds were looking to buy on dips, traders said.
"Technically, having reached $924, we now see the possibility of a move higher toward the next resistance levels at $937 and from there to $951 and $952," Investec Australia said in a daily note. Gold struck a record high of $1,030.80 an ounce on March 17 before falling in a broad commodities sell-off. It hit a two-month low of $872.90 last week.
The Bank of Japan kept its interest rate target unchanged at 0.5 per cent yesterday, as expected.
The European Central Bank is also expected to keep interest rates on hold, but the Bank of England could cut its key rate today.
Gold futures for June delivery on the COMEX division of the New York Mercantile Exchange fell $3.3 an ounce to $914.7 an ounce.
Spot platinum rose to $2,012/$2,022 an ounce from $2,008/$2,018 late in New York. The February TOCOM platinum futures was trading at 6,513 yen a gram, up 30 yen or 0.5 per cent from 6,483 yen.
Silver fell to $17.57/$17.62 an ounce from $17.64/$17.69 an ounce.
Spot palladium eased to $448/$453 an ounce from $449/$457.
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