RTRS: Gold slips to $900, awaits US stimulus package
Gold slipped on Monday as traders took profits from the rally to a nearly four-month high, but the key $900 an ounce level held firm as traders awaited news on the massive U.S. economic stimulus package.
Top aides to President Barack Obama have been urging Democratic and Republican lawmakers to set aside political differences and quickly approve the package, and some traders say a strong performance by Obama could restore investor confidence in U.S. investment, weighing down gold. [ID:N08458993]
On the flip side, more wrangling could raise investors' anxiety over an economic recovery, boosting bullion.
Gold fell $7.1 or 0.9 percent to $904.60 an ounce, off the $930.40 peak touched on Jan. 30, the highest since mid-October.
"Until everything's concrete I suspect that we're not going to see many people selling at this moment," said Darren Heathcote of Investec Australia.
He said investors would be looking not only at the details of the final package but also at how Obama handles the situation as the United States responds to its worst financial crisis in 70 years.
"There's been an awful lot of talk about his ability or lack of experience," Heathcote said.
Koji Suzuki, a senior analyst at Tokyo's SBI Futures Co Ltd, said gold was unlikely to drop sharply, however.
"There is always the risk of inflation, and that would work positively for gold," he said.
Popularity of the precious metal is also evident in the continued high holdings in the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust GLD, which said its holdings as of Feb.8 remained at a record high 867.19 tonnes. [GOL/SPDR]
The speculative net long position in gold rose to 155,306 contracts during the week to Feb. 3 from 141,114 contracts during the week to Jan. 27, data released on Friday by the Commodity Futures Trading Commission (CFTC) showed. [nN06475072]
U.S. employers slashed 598,000 jobs in January, as the national unemployment rate shot up to 7.6 percent, according to the Labor Department. [ID:nN05289845]
Precious metals prices at 0316 GMT Metal Last Change Pct chg YTD pct chg Turnover Spot Gold 905.00 -6.70 -0.73 2.82 Spot Silver 12.99 -0.07 -0.54 14.75 Spot Platinum 985.00 -14.50 -1.45 5.69 Spot Palladium 209.00 -1.00 -0.48 13.28 TOCOM Gold 2675.00 -14.00 -0.52 3.96 18441 TOCOM Platinum 2906.00 30.00 +1.04 9.58 5204 TOCOM Silver 379.40 6.20 +1.66 18.82 246 TOCOM Palladium 622.00 23.00 +3.84 13.09 313 Euro/Dollar 1.2932 Dollar/Yen 91.61 TOCOM prices in yen per gram, except TOCOM silver which is priced in yen per 10 grams. Spot prices in $ per ounce.
