AF: Gold ticks higher but holds below all-time high
By Lewa Pardomuan
SINGAPORE (Reuters) - Gold edged up on Friday as investors turned their backs on the euro on worries that belt-tightening in Europe will slow growth, but the metal lacked fresh momentum to surpass a recent record high.
Gold was heading for its fourth consecutive weekly rise, equalling a run that ended in late November. Bullion's safe haven appeal has increased on worries a $1 trillion rescue package to prevent a Greek debt crisis from spreading to other euro zone states would eventually fail.
Gold was at $1,233.90 an ounce by 0545 GMT, up $2.07 from New York's notional close on Thursday. Bullion struck a record high of $1,248.15 on Wednesday.
In the physical market, purchases from jewellers kept premiums steady in Singapore but high bullion prices ignited sales of scrap in other parts of Asia. Gold bars were offered at premiums of 70 cents to the spot London prices.
For a graphic showing the technical outlook, see:
here
"The technical trend is intact even in the face of U.S. dollar strength, which is amazing. Imagine what gold will do in the face of dollar weakness as gold priced in euro and weaker currencies is virtually hyperbolic," said Aaron Smith, head of Superfund in Asia.
"Once the market fully digests the enormity of the current credit expansion and free money policy which is funding bailouts for everything from banks to sovereign nations, it won't surprise us that gold will trading at $1,500."
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings were unchanged at a record high of 1,209.499 tonnes as of May 13, which suggested that investors had little desire to book profits yet.
U.S. gold futures for June delivery added $6.6 an ounce to $1,235.8 an ounce. Gold priced in euro and sterling held near an all-time high.
The euro steadied near a 14-month low against the dollar on Friday on concerns that rigorous fiscal tightening in Europe would dampen an already-weak recovery.
"I think the market is watching the euro/dollar rates. People are talking about higher prices such as $1,300. Investors still buy gold," said a dealer in Hong Kong. "We don't see much interest from the jewellery sector," he added.
Japan's Nikkei average fell 1.6 percent on Friday, weighed down by exporters such as Canon Inc after U.S. stocks slid on downbeat comments on the economy from company executives.
