ET:Gold heads for third week of gain, Tokyo premiums slip
SINGAPORE: Gold edged down on Friday, pressured by a firmer dollar, but was still on track for a third week of gains as investors eyed a patchy recovery in the global economy.
Gold has risen more than 9 per cent so far this year as concerns over economic growth have boosted its safe haven appeal, although prices are still well below the all-time high of around $1,920 an ounce touched in 2011.
Cash gold eased $3.65 an ounce to $1,318.86 by 0706 GMT, down from a 3-1/2 month high at $1,332.10 hit on Tuesday.
Dealers saw purchases in the physical market this week, but many jewellers could be waiting for a correction. Premiums for gold bars were steady in Hong Kong and Singapore, but fell in Tokyo because of gains in Tokyo gold futures.
"I think $1,330 is pretty much toppish for a while. There's not much incentive at the moment, except for the dollar movements," said Yuichi Ikemizu, branch manager for Standard Bank in Tokyo, who expects gold to trade in a range of $1,300 to $1,335.
"I think (the price) is a little bit too high for Asians to buy gold because we've been below $1,300 for a long time and people bought a lot."
US gold rose $2.30 an ounce to $1,319.20. Trading was cautious after minutes of the Fed's latest policy meeting showed several policymakers wanted to keep cutting monetary stimulus, which could dent gold's appeal as a hedge against inflation.
A survey showing brisk US manufacturing activity gave Asian stock markets a lift on Friday and bolstered the dollar, although underlying concerns about China's economic growth could keep investors from rushing to buy emerging market assets.
The US dollar index against a basket of currencies rose to 80.30 from a eight-week low of 79.927 hit on Wednesday.
In the physical market, premiums for gold bars in Tokyo slipped to zero from 30 cents an ounce to the spot London prices last week. Premiums in Singapore were little changed at $1.20 to $1.50; Hong Kong premiums were at $1.30 to $1.70.
"The gold price in Japanese yen is basically going up, so at this moment, we are seeing a bit of selling from the general public," said a dealer in Tokyo, referring to retail investors.
The most active December gold contract on the Tokyo Commodity Exchange rose 43 yen a gram to 4,346 yen, within sight of a five-month high of 4,366 yen hit on Tuesday.
