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News // Metal market

Gold steady

16 November 2010 , 12:26Reuters1547

Euro zone finance ministers will try to find a way to end Ireland's debt crisis on Tuesday, with Dublin resisting pressure to seek a state bailout by signalling that only its
banks may need help. 

As worries about Ireland dragged on, the dollar touched a six-week high against the euro. 

"The strong dollar is pressuring gold," said Ronald Leung, a physical dealer at Lee Cheong Gold Dealers. "Gold is looking a little bearish in the short term, due to a stronger dollar
and year-end profit-taking."

Talks on more monetary tightening in China and other Asian countries also worried traders. South Korea's central bank raised interest rates for the second time since the global crisis and signalled further tightening as it shifted its focus away from heavy fund inflows to rising inflation.
Spot gold XAU= gained 0.3 percent to $1,363.70 an ounce by 0454 GMT, after falling to $1,354.99 in the previous session, its lowest in nearly two weeks. U.S. gold futures
GCZ0 fell 0.4 percent to $1,363.2 an ounce.

A bearish target at $1,341 per ounce for spot gold XAU= is unchanged, based on a triangle pattern that formed between $1,382 and $1,424, said Wang Tao, a Reuters market analyst.

Physical buying and scrap selling was scarce, dealers said.

"In two to three days, buying will pick up. People are waiting to see prices stabilised before they jump in," said a Hong Kong-based dealer, adding that the ongoing Indian wedding
season and upcoming Lunar New Year will provide support to physical demand.

CME MARGIN HIKE

The Chicago Mercantile Exchange said it would raise margin requirements for gold by 5.9 percent and 11.5 percent for silver, among other precious metals, effective at the close of
business on Nov. 16. 

"Some speculative positions may be liquidated after the margin hike," said a Singapore-based trader.

Spot silver XAG= gained 1.5 percent to $25.80.

Platinum XPT= fell to $1,663.25, its lowest in more than three weeks, before recovering to $1,669.49.

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