News // Metal market
Gold Lower on Dollar
12 October 2010 , 12:15Reuters1626
The dollar held its ground against the euro and a basket of currencies on Tuesday, showing signs it may retain near-term gains from a short-covering bounce as players take some short positions off the table.
The weakening dollar has helped fuel the rally in most commodities in the past few months, pushing gold to continuous record highs and copper to its highest in more than two years.
"Fundamentally the story remains intact for gold. I still think gold will trade at $1,500 and will trade higher than that in the medium-term future," said a Singapore-based trader.
"But at the moment, I think the market is too long and too bullish. We might see the rally capped and the downside may expand a little further."
Spot gold was trading at $1,346 an ounce by 0617 GMT (2:17 a.m. EDT), down 0.5 percent from the previous close. Gold hit an all-time high of $1,364.6 last week.
U.S. gold futures fell 0.6 percent to $1,346.8.Spot gold is expected to return to the October 8 low of $1,324.85 per ounce, as it could be rangebound between $1,234.85 and $1,364.60 for a few trading sessions, said Wang Tao, a Reuters market analyst.
"We are likely to see some consolidation in the short term after the strong rally, before prices head higher again. The level around $1,300 would lend very strong support," said Hou Xinqiang, an analyst at Jinrui Futures in China.
"So as long as we continue to see disappointing data, which points to a feeble economic recovery, the strength in gold will remain."
A slowdown in economic growth in the world's developed countries looks increasingly likely, the OECD said on Monday, highlighting signs the recovery may now have peaked in the United States.
Investors are eyeing the minutes from the Federal Reserve's September policy meeting, due later on Tuesday, for clues to the possibility of further monetary easing by the central government.
But speculation on the second round of quantitative easing from the Fed has been priced in for the past few weeks, and the market is now on the lookout for stimulating news, said traders.
Holdings in the SPDR Gold Trust declined for a third consecutive session to 1,287.327 tonnes by October 11.
Physical demand in Asia remains robust, as seasonal strong demand from India and China lends support, traders and analysts said.
10:21 03.09.2018Iran and Iraq dump dollar in bilateral trade
12:06 24.08.2018Europe unveils financial aid package for Iran
12:47 30.05.2018Zangeneh. Total Has 60 Days to Negotiate Sanctions Waiver with US