BLBG:Cash Gold Little Changed in Thin Holiday Trade; Awaits U.S. Economic Data
Gold was little changed in thin holiday trading amid speculation that the U.S. economic recovery may continue and curb demand for the precious metal as a haven investment.
Cash bullion traded little changed at $1,604.45 an ounce at 2:51 p.m. Singapore time. Spot silver was at $29.11 per ounce and there were no trades in platinum and palladium. Hong Kong, Singapore and Australia are closed today.
Orders for durable goods rose in November by the most in four months, the U.S. Commerce Department said on Dec. 23. A day earlier, the Labor Department data showed initial jobless claims fell by 4,000 to 364,000 the previous week, versus a forecast in a Bloomberg survey for an increase to 380,000. Home prices in 20 U.S. cities probably declined at a slower pace and consumer confidence rose to a five-month high, data this week may show.
“Investors are quite anxious to see if the U.S. economy is holding up, which will boost the dollar while reducing the gold’s appeal as a safe haven,” said Wang Xinyou, senior gold analyst at Agriculture Bank of China. The dollar index has climbed by about 10 percent from a low in May, Wang said.
Holdings in bullion-backed exchange-traded products fell for a sixth day on Dec. 22 to the lowest level since Nov. 15, according to data tracked by Bloomberg News.
“Gold price has risen 13 percent this year, a quite considerable gain,” Wang said. “Gold will face some selling pressure ahead if the market reaches a consensus that the U.S. economy is gaining strength heading into 2012.”
The precious metal touched a record $1,921.15 on Sept. 6 as investors sought to hedge against market turmoil. Prices have dropped 8 percent this month, touching $1,560.97 on Dec. 15, the lowest level since Sept. 26.
“Even though there are signs of a recovery in the U.S. economy, European economic concerns still do exist and many issues require clarity and direction,” Reena Walia Nair, senior analyst at Angel Commodities Broking Pvt., said by phone from Mumbai. “There may be a relief rally in the beginning of 2012 and some risk aversion may creep in later.”
--Feiwen Rong, with assistance from Swansy Afonso in Mumbai. Editors: Ovais Subhani, Thomas Kutty Abraham
To contact Bloomberg News staff for this story: Bloomberg News in Beijing at emailtv@bloomberg.net
To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net
