News // Metal market
15 November 2010 , 11:22Reuters2251
Spot gold XAU= was little changed at $1,365.75 an ounce by 0702 GMT, after falling three percent on Friday as talks of an imminent interest rates hike in China triggered a broad
Debt woes in Europe continued to brew, with Ireland on Sunday saying it did not rule out the possibility that it may have to turn to Europe for help in dealing with its debt
Leadership meetings of the Group of 20 and APEC held last week largely failed to offer guidance on currency issues vexing the global economy.
"G20 and APEC meetings last week didn't really give a clear direction to the market," said Peter Fung, head of the dealing department at Wing Fung Precious Metals. "The market is mixed from here on, with today's range likely to be $1,350 to $1,380."
While some short-covering was spotted in the market, others were seen liquidating long positions, as the market takes a breather from its record-breaking rally, Fung said.
Offering support to the market, Vietnam has abolished the import duty on gold in another effort to cool domestic prices of the metal after it has granted gold import quotas last week,
Spot gold XAU= is expected to fall more to $1,341 per ounce based on a bearish triangle pattern on the hourly chart, said Wang Tao, a Reuters market analyst.
"We may see some consolidation, but the overall trend is still looking up, as the Federal Reserve's second round of quantitative easing sets the tone for ample liquidity for the
"We have seen a quite volatile market in the past week, as investors were nervous after prices hit record highs. We could see gold pull back to $1,330 to $1,350 level."
Li said a major factor in the market was China. The world's largest gold producer and a fast-growing consumer of the metal, saw its consumer inflation index jump to a 25-month high in
"While people are worried about inflation and have shown a growing appetite to invest in gold, a rate hike would knock prices down," said Li.
China should move to a more prudent monetary policy and guard against risks from loose money conditions used to counter the global financial crisis, a central bank researcher said.
Spot silver XAG= rose as much as 1.8 percent to $26.46, before easing to $25.95.
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