TOKYO — Gold softened a touch to around $935 today on position adjustments, giving up gains from the previous session when it briefly rose to a two-week high. Recent encouraging data from the US and easing inflation worries have dulled some of bullion’s appeal as an alternative investment, causing the precious metal to largely move within a broad band between $920 and $940.
Gold briefly rose to $948,20 per ounce on Friday, its highest since June 12. Shuji Sugata, a manager at Mitsubishi Corp Futures & Securities, said the metal was leaning towards $940, supported by last week’s comments by China that it might consider reviewing its assets. On Thursday, the head of the economic department of China’s Communist Party policy research office said the country should buy more gold, and that purchasing land in the United States was a better option for China than buying US Treasuries. [ID:nBJC000344]
“Although China has been saying this since last year, it is a factor supporting gold,” he said. Gold was at $936,45 per ounce at 0525 GMT, down 0,2% from the notional close of $938,05 in New York. Sugata said gold was unlikely to move dramatically for the next few days, however, given that it is the end of the month. He added that he did not anticipate much market volatility this week although trade was likely to slow ahead of the US Independence Day holiday when liquidity was expected to fall, often a scenario for prices to fluctuate sharply.
“I think the market will lack clear direction as investors will mostly probably try to simply adjust positions,” he said. US gold futures for August delivery were at $937,1 an ounce, down 0,4% from $941 on the COMEX division of the New York Mercantile Exchange on Friday. The dollar steadied on Monday after falling broadly late last week on China’s renewed call for for a super-sovereign reserve currency and as improving appetite for risk dampened its appeal. Reflecting that gold may have lost some of its appeal to investors, the world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust (GLD), said its holdings remained at 1125,74 tonnes as of June 26, when it fell 0,5%.
It is currently down 0,7% from a record volume of 1134,03 tonnes, marked on June 1. Noncommercial net long US gold futures positions fell 5,3% to 166294 lots in the week to June 23 from 175543 lots, a weekly report by the US Commodity Futures Trading Commission showed. In other precious metals markets, spot silver fell by as much as 1,4% to $13,86 per ounce, down from the notional New York close of $14,06 and heading towards a roughly two-month low.
