Metals
Metals
Gold steady after dollar weakens, still range-bound
LONDON - Gold steadied after the dollar weakened slightly against the euro, but the precious metal was still range-bound.
At 1.48 pm, spot gold was largely flat at 662.25 usd per ounce against 663 usd in late New York trades yesterday. Earlier gold dipped to as low as 657.00 usd. The weaker dollar increased gold's appeal as as an alternative asset.
Earlier in the session gold was under pressure after the dollar rose following hawkish comments from a US Federal Reserve official caused market players to scale back their expectations for an interest rate cut over the coming months. The dollar has now corrected.
"The market is still seen range-bound between 655 usd and 665 usd," said Alex Heath, head of the metals team at RBC Capital Markets.
Steady oil prices supported gold as some investors hedged against inflationary pressures with Brent crude at around 70 usd -- 40 pct higher than mid January prices. "Oil, currency and base metals (are) the key price drivers," said Heath.
Base metals are capping gold's gains currently, with copper -- the leader of the metals board -- 9 pct lower than prices at the start of this month. "The outlook for increased mine output is also weighing on base metals and hence gold prices," added James Steel analyst at HSBC.
Copper is a good barometer for base metals and sentiment for overall commodity prices. "In the near term (gold) prices are likely to consolidate at lower levels before the next push up," said Suki Cooper, analyst at Barclays Capital.
Barclays predicts gold will average 710 usd in the third quarter. Support in the near term will be found at 655, while resistance is at 670 usd, added Cooper.
HSBC predicts gold will average 680 usd this year, while Goldman Sachs reckons the precious metal will fetch 750 usd.
In other precious metals, silver was up at 13.04 usd per ounce from 12.93 usd, platinum was up at 1,292 usd from 1,288 and palladium slipped to 371 usd per ounce from 376 usd.
Bookmarks