SINGAPORE: Gold barely changed on Friday but was heading for its biggest monthly gain since 1999 as investors awaited an OPEC consultative meeting that could support bullion if the group agrees to cut oil output.
Gold often tracks oil due to the metal’s role as a hedge against inflation. Fears of rising energy costs helped send gold to a record of $1,030.80 in March before retreating oil prices, the equities sell-off and a firm dollar erased some of the gains.
Deadly attacks in India’s financial capital of Mumbai failed to trigger safe-haven buying, which dealers blamed on the absence of US speculators during Thursday’s Thanksgiving Day holiday.
Gold was trading at $814.00 an ounce, down $0.60 from Thursday’s levels, and off a six-week high of $830.10 hit on Tuesday. It has bounced nearly 20 percent since tumbling to a 13-month low of $680.80 last month and has risen 12 percent this month.
“We are waiting for the outcome of the OPEC meeting and other economic news. I’d expect the market to hold around $808 to $818,” said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, referring to the current tight range. “We can say gold is still in a range for a little while.”
Weaker oil prices dragged down gold prices to an intraday low of $811.30 an ounce on Friday.
“Some analysts are still talking about gold exceeding $1,000 again. But if the market is really bullish, why can’t it react to terror attacks in India?” asked a dealer in Hong Kong. “I guess people don’t know where gold is heading. Gold has rebounded to the current level from $700 within a space of a few weeks but the market has been very thin,” he said.
Recent losses in equities had forced investors to sell gold to cover losses. Platinum was trading at $851.50 an ounce, down $1.50 from Thursday’s levels.
New York gold futures added $3.1 an ounce to $814.4 in electronic trade. reuters
