Gold slips after rally, below 5-week high
Gold dropped as speculators booked profits after pushing up the price to its strongest level in five weeks, and a lack of buying from jewelers could put pressure on the market.
The physical sector becalmed after heavy selling from holders in Indonesia and Thailand late on Monday, when gold began rising. Premiums for gold bars were unchanged at between 40 and 60 US cents an ounce to the spot London price.
âThe upside momentum, I think, is capped for now. The physical guys are not too keen to buy here,â said William Kwan, bullion director of Gold Capital Management in Singapore.
âExpect gold to be trading between $910 and $945 this coming week as major breakouts might only occur after the holidays,â said Kwan, referring to the US Independence Day holiday on Friday.
Gold has rebounded nearly 6% since falling to a 1-week low at $873.50 last week but remained below a lifetime high of $1,030.80 hit in March.
âCustomers will be more than happy to buy again at below $900. There was aggressive selling from the Indonesians, who have bought gold at lower prices. We've also received a lot of scrap from Thailand,â said a dealer in Singapore.
Oil added 55 cents to $140.55 a barrel on Tuesday, after slipping from a record high above $143 hit the previous day as tension surrounding Iran's nuclear program returned to focus and outweighed concerns over eroding US demand.
Gold futures for August delivery on the COMEX division of the New York Mercantile Exchange fell $2.2 an ounce to $926.1.
The euro was steady at $1.5752, supported by expectations the European Central Bank will raise interest rates by 25 basis points to 4.25% at a policy meeting on Thursday, and possibly further beyond that.
âThe market needs to consolidate. Right now, I would expect the market to see resistance around $928,â said Louis Lok, a dealer at Bank of China in Hong Kong.
âMaybe players need to see oil's next move, whether it can hit another record high,â he said.
In fundamental news, SPDR Gold Trust, the world's largest bullion-backed exchange-traded fund, said its gold holdings rose by 2.5% on Friday, and were up 4.5% week-on-week.
Spot platinum rose to $2,063.00/2,083.00 an ounce from $2,060.00/2,080.00 late in New York. Spot palladium was unchanged $459.00/467.00 an ounce.
Silver edged down to $17.37/17.43 an ounce from $17.38/17.43 late in New York.
The most active Tokyo platinum contract for June 2009 delivery on the Tokyo Commodity Exchange rose „32 yen per gram to „6,957. (Reuters)
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