Gold slips but near 3-month high
Gold dipped on Friday, having rallied to its highest level in almost three months the previous day, but a weaker US dollar and strong oil prices could offer an excuse to investors to buy again.
Gold eased to $942.00/943.00 an ounce from $944.10/945.30 late in New York, as speculators booked profits and jewellery makers in parts of Asia cashed in on the metal’s gains. Gold jumped as high as $947.40 an ounce on Thursday, its strongest since April 17, when it touched $952.60 an ounce. “It’s going to be choppy. I think the market is closely watching developments in oil at the moment. If it breaches $950, I think it’s going to look interesting,” said Mark Pervan, senior commodities analyst with ANZ in Melbourne. “I think around that level it could move higher from there because it could trigger a short-covering rally at that point and some stop-loss selling.”
Gold struck a lifetime high of $1,030.80 in March on record-high crude oil, which raised fears of inflation and expectations of more rate cuts in the United States, making the metal more attractive as an alternative investment.
Oil was steady at $141.69 a barrel after rising 4% in the past session on news of more missiles tests by OPEC member Iran and threats top production in Nigeria and Brazil.
The euro slipped to $1.5774 having risen on concerns over the health of the US financial sector as shares and bonds of the country’s two big mortgage finance companies tumbled on capitalization fears. “I think the market is pretty supported more by the oil price at the moment than the dollar. What’s driving oil markets at the moment is purely geopolitical tension,” said Pervan.
Gold futures for August delivery on the COMEX division of the New York Mercantile Exchange added $1.3 an ounce to $943.3. (Reuters)
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