RTRS: PRECIOUS-Gold edges up on growth fear; defies firm dollar
By Rujun Shen
SINGAPORE, Aug 18 (Reuters) - Gold edged higher on Thursday
on persistent worries about euro zone debt woes and slower
global growth, defying a rebound in the dollar.
The dollar index rose nearly 0.4 percent, after
dropping to a three-week low in the previous session, as the
Swiss franc fell on talks that the Swiss National Bank stepped
up measures to curb the strength of the safe-haven
currency.
Investors, disappointed by this week's Franco-German summit
on the lack of an effective solution to the euro zone's debt
crisis and wary of sluggish global growth prospects, continued
to seek security in bullion.
Spot gold gained 0.3 percent to $1,793.70 an ounce by
0646 GMT, headed for a fourth session of gains. It was only 1.1
percent below its all-time high of $1,813.79 struck last week.
U.S. gold GCcv1 edged up 0.2 percent to $1,796.80.
"Gold is stabilising in the near term," said Ronald Leung, a
physical dealer at Lee Cheong Gold Dealers in Hong Kong.
"But low interest rates in the United States and the messy
situation in Europe will push gold higher."
Leung said physical buying was muted as prices advanced
towards the record high, with investors waiting for a price dip.
Gold-backed exchange-traded funds continued to draw
interest. Holdings in the SPDR Gold Trust , the world's
largest gold ETF, rose by 0.72 percent on the day to 1,271.985
tonnes by Aug. 17.
The Relative Strength Index on spot gold remained above 70,
which suggests the underlying asset has been overbought,
although it has been in this territory for nearly two weeks.
Technical analysis suggested that gold faces resistance at
$1,793 an ounce, said Reuters market analyst Wang Tao.
But gold's bull run still has momentum.
"Although profit-taking, margin requirement hikes and
seasonally soft physical demand could temper the rally
intermittently, the external environment has turned increasingly
fertile for gold," said Barclays Capital in a research note.
Gold's fortunes could be altered in the case of rising real
interest rates, controlled inflation and a stable
macro-environment, it added.
Gold demand fell in the second quarter but is expected to
rise in the full year as Asian buyers add to holdings and safe
haven demand grows, said the World Gold Council.
Spot silver gained half a percent to $40.36 an ounce,
after closing above $40 for the first time in two weeks in the
previous session.
Holdings in the iShares Silver Trust , the world's
largest silver ETF, edged higher to 9,727.10 tonnes by Aug. 17,
the trust said.
"The sentiment in silver is still weak even though prices
are climbing slowly," said a Tokyo-based trader.
He added that although a gold rally traditionally encourages
silver prices to rise, the poor economic outlook has weighed on
demand prospects of the metal, which has wide industrial
applications.
"The 20-day moving average has been a decent support and the
rising channel seems in place, but it will be difficult for
silver to breach $42 unless gold advances towards $1,850."
Spot platinum held steady at $1,836, after rising for
seven sessions straight.
Precious metals prices 0646 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1793.70 5.55 +0.31 26.37
Spot Silver 40.36 0.18 +0.45 30.78
Spot Platinum 1836.00 0.40 +0.02 3.88
Spot Palladium 774.47 4.24 +0.55 -3.13
TOCOM Gold 4425.00 10.00 +0.23 18.66 58450
TOCOM Platinum 4574.00 49.00 +1.08 -2.60 9411
TOCOM Silver 99.10 0.70 +0.71 22.35 464
TOCOM Palladium 1920.00 50.00 +2.67 -8.44 424
COMEX GOLD DEC1 1796.80 3.00 +0.17 26.41 15048
COMEX SILVER SEP1 40.42 0.07 +0.17 30.64 5721
Euro/Dollar 1.4400
Dollar/Yen 76.63
TOCOM prices in yen per gram. Spot prices in $ per ounce.
COMEX gold and silver contracts show the most active months