Gold rises 1% on firm oil
Gold rose as much as 1.3% on Thursday on safe-haven buying as oil continued its ascent and on a sliding dollar, but it would have to crack key resistance levels to sustain the uptrend.
Buying from speculators and physical buyers helped push up bullion, although position squaring could limit gains ahead of Monday’s Labor Day holiday in the United States. “Gold is still capped by the big resistance at $837, and above at $846. I don’t think much would happen ahead of the US long holiday weekend,” said Peter Tse, a dealer at Scotia Mocatta in Hong Kong.
Gold firmed to $834.80/835.80 an ounce from $826.05/827.45 an ounce late in New York on Wednesday, having hit an intraday high of $836.40 an ounce. Physical buying ahead of the festive season in Asia has helped gold rebound more than 7% since tumbling to nine-month lows around $773 an ounce in mid-August.
Oil rose for a fourth straight day to above $119 a barrel on Thursday on fears Tropical Storm Gustav may turn into a hurricane and hit the Gulf of Mexico, crippling the heart of US offshore production. “Perhaps oil could lead gold higher here, and on the oil side, I think Gustav is something we should watch. For the dollar, we will probably have to focus on tonight’s US GDP data for direction,” said Adrian Koh, an analyst at Phillip Futures in Singapore.
The euro edged up to $1.4756, recovering from a six-month low of $1.4570 hit on Tuesday, after comments by a European Central Bank official the previous day scaled back speculation about an ECB rate cut.
Spot platinum slipped to $1,433.50/1,453.50 an ounce from $1,434.00/1,454.00 late in New York, having hit an intraday high of $1,442 an ounce. Higher gold prices had spurred speculative buying in platinum but investors remained cautious after the metal sank to an 11-month low around $1,296 last week. “If platinum can clear the $1,450 level and perhaps make a move to the $1,500 level, then that scenario may change a little,” said Koh of Phillip Futures.
Automakers were also on the sidelines. A slowing US economy and poor car sales have sparked worries about falling demand for autocatalysts, which account for more than 50% of global platinum use. The metal was well below a lifetime high of $2,290 hit in early March.
Toyota Motor Corp said it would miss its goal of selling more than 10 million vehicles next year, cutting its forecast by nearly 7% due to a downturn in western markets driven by high fuel prices and a credit crunch. (Reuters)
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