RTRS: Gold steady near 11-week high on Mideast violence
Gold steadied above $870 on Tuesday, hovering within sight of a 11-week high hit the previous day, with sentiment underpinned by conflict in the Middle East, firm oil prices and a weaker U.S. dollar.
Gold rallied as much as 24 percent in 2008, striking a record high of $1,030.80 in March on fears of rising energy costs and as investors diversified into precious metals on the dollar's uncertain outlook.
"There's a reasonable chance we'll see some end-year profit taking in what has been the best performing commodity this year and certainly this quarter," said Mark Pervan, head of Australia & New Zealand Bank research.
"There's been concerns of high political risk in the market. But I think it might struggle to get through $900 unless there's a major flare up again tonight," he said, referring to the fighting between Israel and Hamas in Gaza.
Gold was trading at $877.70 an ounce, up $0.20 an ounce from New York's notional close on Monday, when it rallied to as high as $889.55 an ounce after oil jumped more than $2 on fears Israeli attacks on Hamas could disrupt oil supplies.
Buying from Japanese investors amid fears of a global recession helped gold stay at current levels, dealers said. Gold last traded above $900 in early October, before tumbling to its weakest in 13 months around $680 after sell-off in equities and fears of a deepening global economic downturn forced investors to cash in to cover losses.
It slowly regained its safe-haven appeal after stock markets stabilised, with a rebound to around $800 also igniting technical buying.
Israeli warplanes killed 10 Palestinians in attacks that targeted Hamas government buildings and other symbols of the Islamist group on the fourth day of the fiercest air offensive in Gaza in four decades. [ID:nLU691622]
Oil rose for a third day on Tuesday on tensions in the Middle East but prices were still on track to end the year down 60 percent, the biggest annual loss on record. [O/R]
"Although gold has the energy to head higher, sustainability would be a key factor," said Pradeep Unni at Richcom Global Services in Dubai, adding that gold had in the past failed to hold on to gains driven by geopolitical tensions.
He pegged resistance around $930 an ounce, a near three-month high hit in early October.
The euro rose to $1.4062 as tensions in the Middle East weighed on the U.S. currency. [USD/]
Investors are awaiting the release of U.S. consumer confidence for December, due at 1500 GMT. Economists polled by Reuters expect a reading of 45.0 compared with 44.9 in November.
Platinum was trading at $908.50 an ounce, down $7.00 from New York notional close.
New York gold futures added $3.2 an ounce to $878.5 in electronic trade. Precious metals prices at 0245 GMT Metal Last Change Pct chg YTD pct chg Turnover Spot Gold 877.70 0.20 +0.02 5.40 Spot Silver 10.87 0.02 +0.18 -26.40 Spot Platinum 908.50 -7.00 -0.76 -40.23 Spot Palladium 182.00 -3.50 -1.89 -50.54 TOCOM Gold 2573.00 -7.00 -0.27 -15.92 15541 TOCOM Platinum 2652.00 -7.00 -0.26 -50.33 4585 TOCOM Silver 319.30 6.00 +1.92 -40.98 325 TOCOM Palladium 550.00 16.00 +3.00 -59.29 254 Euro/Dollar 1.4095 Dollar/Yen 90.31 TOCOM prices in yen per gram, except TOCOM silver which is priced in yen per 10 grams. Spot prices in $ per ounce. (Reporting by Lewa Pardomuan; Editing by Kazunori Takada)
