CNBC: Gold Ticks up on Firm Stocks; Euro, ETF Slips
Gold ticked up on Monday after a drop in the U.S. dollar spurred bargain hunting, with firmer stock markets helping investors shrug off a slight decline in ETF holdings.
Jewellers were on the sidelines after buying heavily on Friday, when bullion fell to a five-week low. With U.S. investors away for a holiday, the metal was likely to trade in a tight range of $1,210 to $1,215 an ounce.
Spot Gold [XAU=X 1212.65 2.05 (+0.17%) ] rose $2.95 to $1,213.55 in Asian trade, having fallen below the psychological level of $1,200 on Friday. The metal struck a record above $1,264 in late June on worries the European debt crisis would spread and the U.S. economy was
slowing.
"I wouldn't say that jewellery or physical buying would really provide support because prices are still relatively high. But of course people are buying on dips," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.
"I don't foresee it dropping below $1,200. I think on a long-term basis, I would still be bullish," she added.
U.S. gold futures for August delivery added $5.3 an ounce to $1,213.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust [GLD 118.49 1.45 (+1.24%) ], said its holdings slipped to 1,318.915 tonnes by July 2 from 1,319.219 on July 1. The holdings hit a record at 1,320.436 tonnes on June 29.
"For people to really think that investment demand for gold is declining, it has to drop a lot more than what we are seeing right now," said Ong.
The dollar was at its lowest in nearly two months on Monday and the euro paused after last week's boost from unwinding of short and leveraged positions, with traders and analysts seeing scope for it to squeeze a bit higher.
The MSCI index of Asia Pacific shares outside Japan was up 0.2 percent, though gains in resources and technology shares were mostly offset by declines in consumer staples, financials and telecom stocks.
"Bargain hunters have pushed up the gold market. I don't see much demand from the jewellery sector. They had bought a lot on Friday," said a dealer in Hong Kong.
"In the absence of U.S. players, the market may have a chance to edge up in Asia but then drop again when Europe starts trading."
Oil rebounded from three-week lows on Monday, staying above $72 as the market assessed the implications of a slowing global economic recovery on energy use.
