RTRS: Gold steady after biggest daily gain in 2 wks
SINGAPORE (Reuters) - Gold trimmed early gains on Tuesday as speculators booked profits after bullion posted its biggest daily gain in two weeks the previous day, but firm oil and optimism about U.S. economic plans underpinned sentiment.
U.S. President-elect Barack Obama pledged to create more than 2.5 million new jobs by 2011, while Chinese and European leaders plotted their next steps as investors looked to governments to lead major economies out of recession.
Gold hit an intraday high of $776.45 an ounce before slipping to $771.40, barely changed from New York's notional close of $771.30 as the euro turned lower against the U.S. dollar.
Gold has bounced more than 10 percent since tumbling to a 13-month low of $680.80 in late October, when a sell-off in equities forced investors to dump bullion to cover margin calls. Bullion was still 25 percent below March's record of $1,030.80.
"We are still in a relatively wide range because we are still faced with a great deal of uncertainty in the present moment," said Darren Heathcote of Investec Australia in Sydney.
"But gold will benefit from a weaker dollar, from a strong oil or it will benefit from a stronger stock market as it's probably less need for margin calls."
Oil extended gains, moving away from four-year low hit last week, due to gains in share markets, deepening cuts by Saudi Arabia and expectations of a new OPEC deal next week.
Dealers also awaited the outcome of the U.S. Federal Reserve's Federal Open Market Committee meeting on interest rates on Dec. 15, which could determine the direction of the dollar and precious metals.
"The expectation is the dollar will soften after the rate cut and that will be supportive for gold. But I think gold will trade in a range for the time being," said a dealer in Hong Kong. Continued...
