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Message: Gold Eases on Firm Dollar, Investment Demand Supports
Gold Eases on Firm Dollar, Investment Demand Supports
Published: Thursday, 19 Nov 2009 | 10:51 PM ET By: Reuters Gold eased on Friday as the dollar's rise prompted investors to book profits after prices At current market levels, gold was set for a weekly gain of about 2 percent, for a third straight week of rises. Bullion rallied successively to record highs this month, underpinned by a number of central bank gold purchases earlier in the month, including India's acquisition of 200 tonnes of the Falling U.S. equities on growing caution about the U.S. economic outlook may also have helped highlight gold's safe-haven appeal, adding to the bullish sentiment. "Underlying sentiment remains good in the gold market," said Ben Westmore, commodity economist at National Australia Bank. "The financial crisis has caused a structural shift in investment behaviour, with market participants now holding a greater preference for less opaque assets where the underlying
hit record highs above $1,150 earlier in the week, but bullion's appeal as an alternative asset kept support firm.
precious metal from the International Monetary Fund.
asset is well defined. This continues to buoy sentiment around gold," he said.
Spot gold fell 0.3 percent to $1,140.50 per ounce as of 0238 GMT compared to New York's notional close of $1,143.50. Spot gold hit a record $1,152.75 an ounce on Wednesday.
U.S. gold futures for December delivery were little changed at $1,141.2 per ounce compared to $1,141.90 an ounce on the NYMEX. Futures hit a record high of $1,153.40 on Wednesday. Traders have said prices also got a boost from the elevated levels of call options, or rights to buy, for U.S. December gold futures. Investors remained wary of substantial amounts of open positions remaining in call options with a strike price of $1,200 due to expire next Monday, which could sharply boost volatility. Gold's rally was bound to spur profit-taking, but losses are likely to be limited as investors have been eager to buy back gold as soon as prices ease, keeping the uptrend long-lasting "Gold is moving on its own factors now, away from the currency, supported by improving supply and demand balances, including central bank purchases and less recycling despite high A World Gold Council report released on Thursday showed that supplies to the market of recycled gold rose 31 percent to 283 tonnes in the third quarter. But that was down from 314 tonnes in the second quarter and also a drop from 569 tonnes in the first The WGC also said on Thursday that only a "negligible" 1.5 tonnes of gold had been sold by signatories of the Central Bank Gold Agreement in the year starting Sept. 27. Traders said sentiment was also boosted by a report that billionaire hedge fund manager John Paulson was launching a new gold fund using $250 million of his own money. The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust
regardless of the dollar's movements, some analysts said.
prices," said Koichiro Kamei, managing director at financial research firm Market Strategy Institute in Tokyo.
quarter of 2009.
said its holdings stood at 1,117.493 tonnes as of Nov. 19, unchanged from the previous day.
http://data.cnbc.com/quotes/GLD"http://data.cnbc.com/quotes/US%40GC.1"The greenback and yen kept rising against other currencies on Friday as investors took profits from gains made in the past months in risk assets including higher-yielding currencies. Declines in equities are likely to reinforce such moves.
Copyright 2009 Reuters.
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