News // Metal market
Gold tracks euro higher
22 November 2010 , 10:21Reuters1706
China's steps to rein in inflation could dim gold's appeal in the world's second-largest consumer after India, but dealers said a drop in bullion prices from all-time high levels were attracting purchases from other consumers in Asia.
Spot gold added $7.15 an ounce to $1,361.30 an ounce by 0617 GMT, still well below a lifetime high around $1,424 an ounce struck in early November. U.S. gold futures for December delivery rose $8.7 to $1,361 an ounce.
Spot gold is technically neutral as it hovers within a range of $1,340-$1,365 per ounce, and a further development of the chart is necessary to confirm its next directional move, according to Reuters market analyst Wang Tao.
"Asian people are still happy to buy gold. For the time being, gold is neutral, trading on either side," said Leung, adding that gold could be under pressure if China did raise
China sought on Monday to reassure people that inflation will remain in check, voicing confidence that ample grain supplies and excess capacity in industry will keep a lid on
Silver rose more than 1 percent on firm gold and after holdings on the exchange-traded fund hit another record. A rally in the Nikkei spurred buying in platinum and palladium . Palladium and platinum often track equity markets because of their industrial use.
The euro, Asian stocks and commodities got a fillip on Monday after global financial authorities agreed to bail out debt-swamped Ireland and protect Europe's wider financial stability.
The size of Ireland's aid by the European Union and the International Monetary Fund has yet to be negotiated, but is likely to be smaller than Greece's 110 billion euros bailout last May. One source said it could total 80 to 90 billion euros.
A strong euro helped offset worries about China's move to tighten the economy. The People's Bank of China announced on Friday it would increase required reserves by 50 basis points, its fifth such announcement this year, in a fresh attempt to keep a lid on inflation.
In the physical sector, premiums for gold bars in Singapore were steady at 70 cents to the spot London prices.
"It's a pretty slow start but we do see some buying around from Indonesia and Thailand as well as physical offtake," said a dealer in Singapore.
iShares Silver Trust , the world's largest silver-backed exchange-traded fund, said its holdings rose to another record of 10,814.62 tonnes by Nov. 19.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust , said its holdings rose to 1,289.336 tonnes by Nov 19 from 1,286.299 tonnes on Nov 18. The holdings hit a record at 1,320.436 tonnes on June 29.
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