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4 years ago
PRECIOUS-Gold extends gains into 4th session, near 1-month top
July 23, 2013 / 4:16 AM / 4 years ago

PRECIOUS-Gold extends gains into 4th session, near 1-month top

4 Min Read

* Prices supported by weaker dollar, China demand
    * Dollar index near one-month lows after 0.5 pct fall on
Monday
    * Gold's decline may have bottomed out - Reuters poll

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, July 23 (Reuters) - Gold rose for a fourth
straight day on Tuesday, hovering near a one-month high hit in
the previous session, boosted by a weaker dollar and strong
buying from China.
    Gold has recovered about $150 from a three-year low of
$1,180.71 an ounce hit on June 28, after the U.S. Federal
Reserve said it would only start phasing out its stimulus once
it was sure the economy was strong enough to stand on its own.
    This allayed fears of imminent cuts to the Federal Reserve's
monthly bond purchases, which is tantamount to printing money
and supports gold's appeal as a hedge against inflation.
    Spot gold rose 0.03 percent to $1,335.40 by 0733 GMT,
after technical buying pushed it past the $1,300 level on
Monday. Gold rose as much as 0.2 percent earlier in the session.
    The precious metal is on track for a jump of more than 8
percent in July, its biggest monthly rise in 1-1/2 years.
    "People are more confident that the downside risk has
subsided just a little bit. The message from the Fed was not too
worrisome, as it was before," a Hong Kong-based precious metals
trader said.
    "Demand from China is quite healthy and has been a lot more
reliable. It's helping offset some of the losses from India,
where demand has fallen off."
    India, the world's biggest consumer of gold, has imposed new
rules on gold imports this year in a bid to reduce its current
account deficit. 
    China, on the other hand, has been buying consistently, gold
dealers have said, pointing to elevated premiums on the Shanghai
Gold Exchange.
    Shanghai gold is about $20 an ounce more expensive than
London spot prices, and gold futures rose nearly 2
percent on Tuesday. 
    Spot gold also drew support from a softer dollar that
made assets priced in the greenback cheaper for holders of other
currencies. 

    MORE UPSIDE?
    Despite this month's gains, gold is down 20 percent for the
year in its worst annual performance since 1997. 
    Analysts polled by Reuters slashed their 2013 gold and
silver price forecasts and expect them to remain weak in 2014.
 
    Nonetheless, price views for the second half suggest gold's
slide may have bottomed out after it hit its lowest in nearly
three years last month, according to a survey of 30 leading
analysts and traders conducted in July.
    Gold hit a one-month high of $1,338.91 on Monday as
speculators fearing a reversal of the recent downward price
trend rushed to buy.
    "Should we move along this trajectory, we could conceivably
get to $1,460 from here, not necessarily an outlandish target,
but one which we think is somewhat of a stretch, unless U.S.
macro indicators take a decisive turn for the worst," INTL
FCStone analyst Edward Meir said. 
    
  Precious metals prices 0733 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1335.40    0.36   +0.03    -20.25
  Spot Silver        20.37   -0.16   -0.78    -32.73
  Spot Platinum    1437.25   -3.25   -0.23     -6.37
  Spot Palladium    741.97   -2.03   -0.27      7.22
  COMEX GOLD AUG3  1334.70   -1.30   -0.10    -20.35        29479
  COMEX SILVER SEP3  20.36   -0.15   -0.75    -32.84         8409
  Euro/Dollar       1.3204
  Dollar/Yen         99.40
 
  COMEX gold and silver contracts show the most active months
 
 (Editing by Clarence Fernandez)

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