Gold above $960 on dollar, platinum hits 2-month low
Gold extended gains on Tuesday as uncertainties in the US financial system lingered, making the metal an attractive alternative investment, while platinum fell to its lowest level in more than two months on demand fears.
Gold rose to $967.50/968.50 an ounce from $961.75/963.15 an ounce late in New York on Monday - not far from a four-month high of $987.75 hit last week.
Physical buying was limited as jewelers waited for clues from the energy market after oil slipped from this month's all-time peak above $147 a barrel, dealers said.
“It's a very slow physical market. Oil is down from last week's levels but nobody knows when it will rebound,” said Ellison Chu, manager of precious metals at Standard Bank Asia Ltd in Hong Kong.
He expected bullion to trade in the range of $960 to $980 an ounce.
The benchmark Tokyo gold contract for June 2009 delivery on TOCOM rose ¥28 per gram to ¥3,341. It hit a one-week high of ¥3,345 yen - just below a 25-year high of ¥3,346 struck last week.
The euro was barely changed at $1.5925, having gained in New York with the market focusing on a rescue plan for troubled US mortgage finance giants Fannie Mae and Freddie Mac.
“There's a very bullish momentum here. Gold is well supported above the $955 level,” said Willian Kwan, bullion director at Gold Capital Management in Singapore.
“I believe there's an increase in short positions by the small specs. They might be washed out when the price of gold hits $972,” he said.
Oil eased 41 cents to $130.63 a barrel as Tropical Storm Dolly, the first big storm threat of 2008 for offshore oil producers in the Gulf of Mexico, looked unlikely to affect US production.
Spot platinum hit a low of $1,825.50, its lowest since May 2, before rebounding to $1,843.50/1,863.50 an ounce, up from $1,837/1,857 in New York. Platinum was hit by fears of falling demand for auto catalysts due to a slowing US economy.
“There's not much large fund buying in platinum at the moment. That's why it's not moving, it's coming off,” said Kwan of Gold Capital Management.
“Take a look at other indicators, maybe RSI. It's oversold. I think things should pick up from here,” he said. Platinum's 14-day relative strength indicator (RSI) stood at 20.45, down from 50.91 last week. The market views an RSI of 30 or less as oversold and 70 or more as overbought.
Gold futures for August delivery on the COMEX division of the New York Mercantile Exchange added $4.8 to $968.50 an ounce. (Reuters)
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.