Safe haven gold steady on mounting Italy debt worry

Gold prices hovered above $1,790 on Tuesday, after soaring more than 2 percent in the previous session, supported by safe haven demand as Italy took centre stage in the eurozone debt crisis.

hidden November 08, 2011 10:46:04 IST
Safe haven gold steady on mounting Italy debt worry

Gold prices hovered above $1,790 on Tuesday, after soaring more than 2 percent in the previous session, supported by safe haven demand as Italy took centre stage in the eurozone debt crisis.

Italian government bond yields soared to near 15-year highs, putting the eurozone's third largest economy front and centre of the region's debt crisis, despite efforts by policymakers scrambling to stem growing contagion.

Safe haven gold steady on mounting Italy debt worry

Italian government bond yields soared to near 15-year highs. Reuters

"Gold will continue to trend higher due to the euro zone situation and should have no problem rising above $1,800 in the short term," said Hou Xinqiang, an analyst at Jinrui Futures.

Although he cautioned that prices could correct after it pierces through that level under pressure of profit-taking trades.

Spot gold edged down 0.2 percent to $1,791.69 an ounce, easing from a 6 and a half week high of $1,798.09 hit in the previous session.

US gold inched up 0.1 percent to $1,793.50.

Technical analysis suggested spot gold could target $1,823 to $1,829 range during the day, said Reuters market analyst Wang Tao.

Spot gold prices have rallied nearly 5 percent so far this month, as mounting doubts over the eurozone's ability to tackle its two-year-old debt crisis drove investors to safe-haven assets, and decoupled gold from other commodities which it had followed through much of the past two months.

The world's biggest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings rose 0.85 percent from the previous session to 1,255.66 tonnes by 7 November, the highest in more than two months.

"For the moment the market is worried there is still further liquidation to come, but we believe that is going to come to an end," said Michael Jansen, commodities analyst with JPMorgan.

"There has been a very observable transfer of gold ounces in terms of investment capital from hedge funds, wholesale funds, bullion banks, towards the retail community, and that has put a floor in the price."

Jansen forecast an average $1,869 for gold prices in 2012.

The physical market was muted, as dealers reported light selling and little buying in Singapore.

"The sellers are not eager to cash out before prices hit $1,800," said a Singapore-based dealer, "People are basically watching what is going to happen in Europe."

Reuters

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Gold jumps 2% as Fed bonanza stalls cash rush; US confident of clinching economic stimulus package soon
Business

Gold jumps 2% as Fed bonanza stalls cash rush; US confident of clinching economic stimulus package soon

Spot gold rose 1.3 percent to $1,573.17 per ounce. The metal rose 3.7 percent on Monday, its highest percentage gain since June 2016.

Gold jumps past $1,700 level for first time in 7 years on virus fears; investors scurry for safe havens as oil price plunge hammers equities
Business

Gold jumps past $1,700 level for first time in 7 years on virus fears; investors scurry for safe havens as oil price plunge hammers equities

Spot gold rose 1.5 percent to $1,699.20 per ounce, having touched its highest since December 2012 at $1,702.45 earlier in the session.

Gold rises Rs 328 to Rs 39,028 per 10 gram, silver prices jump Rs 748 amid doubts over US-China trade deal
Business

Gold rises Rs 328 to Rs 39,028 per 10 gram, silver prices jump Rs 748 amid doubts over US-China trade deal

In the international market, gold was trading marginally lower at $1,470 an ounce, while silver was quoting higher at $17.10 per ounce.