Gold advances to near one-week high as oil firms

 

Gold advances to near one-week high as oil firms

SINGAPORE - Gold rose to its highest in nearly a week on Wednesday after gains in oil prices spurred buying, which also helped to pluck cash platinum from its lowest level in nearly a year.

By (Reuters)

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Published: Wed 20 Aug 2008, 2:08 PM

Last updated: Sun 5 Apr 2015, 11:55 AM

Dealers expected consumers to buy gold on dips and said the world's largest consumer, India, would step up purchases ahead of a series of key religious festivals that culminate in October with Diwali, the Hindu festival of lights.

Gold rose to $813.30/814.30 an ounce from $810.70/811.90 an ounce late in New York on Tuesday and off last week's nine-month lows around $773. But the metal was still well below a lifetime high of $1,030.80 struck in March.

‘A volatile price range is expected in a thinner and lower liquidity trading environment,’ said William Kwan, bullion director at Gold Capital Management.

‘Any significant selling or buying interestwill easily sway prices either way and trigger both buy and sell stops orders.’

Premiums for gold bars shot to their their highest level this year as consumers returned to the physical market in droves, encouraged by a sharp drop in bullion prices ahead of key religious festivals in Asia.

‘These price levels are acceptable for jewellery makers and private investors buying on the ETF. From now on, actual demand will recover,’ said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo.

‘For the time being, $800 is the bottom price,’ he said.

The bullion holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped to their lowest level in more than a month around 651 tonnes NYS-but the recent correction in gold prices could spur new buying.

Oil prices inched up above $115 a barrel as a lower US dollar rekindled buying in oil and other commodities.Spot platinum rose to $1,345.50/1,365.50 an ounce from $1,344.50/1,364.50 an ounce late in New York, having fallen to its weakest since last September around $1,296 on Tuesday.

‘Sentiment has been hit since auto makers lowered their production forecast. The market is also concerned about growing worries over the outlook of the global economy,’ said Shuji Sugata, manager at Mitsubishi Corp Futures and Securities Ltd.

Platinum hit a record high of $2,290 in March after a power shortage in main producer South Africa disrupted mining and triggered supply worries. The price has since fallen on profit taking and a slowing US economy that has raised fears of falling demand for autocatalysts.

New York gold futures for December added $2.8 an ounce to $819.60.

Spot palladium gained to $285.00/293.00 an ounce from $280.00/288.00 an ounce. Silver rose to $13.25/13.30 an ounce from $13.15/13.21 late in New York.

The most active Tokyo gold contract for June 2009 delivery on the Tokyo Commodity Exchange rose 98 yen per gram to 2,894 yen, having fallen to its weakest since late November in previous session.

Precious metals prices at 0714 GMT

MetalLastChange Pct chg YTD pct chg Turnover

Spot Gold813.700.45+0.06-2.28

Spot Silver13.250.04+0.30-10.29

Spot Platinum1348.50-1.00-0.07-11.28

Spot Palladium285.001.50+0.53-22.55

TOCOM Gold2892.0096.00+3.43-5.49 46368

TOCOM Platinum4739.00 157.00+3.43-11.24 22683

TOCOM Silver472.2021.90+4.86-12.72 1045

TOCOM Palladium 1023.0052.00+5.36-24.28 1100

Euro/Dollar1.4744

Dollar/Yen110.04

TOCOM prices in yen per gram, except TOCOM silver which is priced in yen per 10 grams. Spot prices in $ per ounce.



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