SINGAPORE (Reuters) - Gold advanced on Thursday on speculative buying driven by uncertainties about when the U.S. Congress might approve a $700 billion bailout plan to help resolve turmoil in financial markets.
Record holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, also supported gold but dealers said there was a lack of new buying from investors, who had already snapped up bullion when it hit an 11-month low.
Gold was trading at $889.20 an ounce, up $8.20 an ounce or 0.93 percent from New York’s notional close on Wednesday.
Gold tumbled to $736 on September 11, its weakest in nearly a year, before climbing steadily to hit a 7-week high of $908.80 on Monday. Increases in SDPR holdings reflected buying within the two-week period, when gold jumped more than $170, dealers said.
“We’ve just got their data now. It’s not like they can release that data to us on the day the gold prices rallied. Not the case,” said Mark Pervan, an ANZ senior commodity analyst in Melbourne.
“The market at the moment is a bit at a wait-and-see stance or approach. They are looking at how particularly the U.S. financial situation unfolds. People are not prepared to buy or sell strongly,” he said.
The SPDR Gold Trust said its gold holdings rose another 2 percent on Sept 23 to a record 724.94 tonnes..
The trust has seen its holdings increase by 18 percent or more than 100 tonnes since Lehman Brothers filed for bankruptcy protection on Sept 15.
In the physical sector, some speculators were still cashing in on bullion’s recent spike, putting pressure on premiums for gold bars..
“Premiums have dropped to $1 from $1.50 earlier this week. People are more on the selling side because we’ve seen Indonesia, Thailand and Vietnam buying like crazy recently,” said a dealer in Singapore.
In the financial markets, Congress looked close to reaching a deal to approve a $700 billion plan to bail out the U.S. financial system and President George W. Bush called an emergency meeting for Thursday to hammer out details.
The euro edged to $1.4718 with the dollar hurt by uncertainties over the bailout plan. <USD/>
“Gold and silver are currently having difficulty in finding new buying interest to break the respective upside targets of $920 and $14,” said William Kwan, bullion director at Gold Capital Management in Singapore.
“This is mainly due to lack of commitment of fresh funds into precious metals,” he said.
Gold was last traded around $920 in July. Silver, which often tracks gold, last hovered around $14 late last month.
Gold futures for December delivery on the COMEX division of the New York Mercantile Exchange added $0.6 an ounce to $895.6 an ounce.
Platinum was trading at $1,189.50 an ounce, down $3.00 or 0.25 percent from New York’s notional close.
Editing by Clarence Fernandez