RTRS: CANADA STOCKS-TSX opens lower as commodities fall
By Risa Maeda
TOKYO (Reuters) - Gold inched higher on Monday as the dollar stayed weaker, underpinning investors' demand for bullion as a hedge against the U.S. currency.
The dollar hovered near recent lows against the euro, weighed down by a recovery in risk appetite as stock markets in the region added to their recent gains.
Japan's Nikkei share average hit a six-week high on Monday, boosted by hopes for better-than-expected Japanese corporate results. .
Spot gold edged up 0.3 percent to $952.70 per ounce as of 0348 GMT, compared with New York's notional close of $950.35 ounce on Friday.
U.S. gold futures for August delivery inched down to $952.90 per ounce. The contract settled down $1.70 at $953.10 on Friday on the COMEX division of the New York Mercantile Exchange.
"Gold is holding relatively well as the dollar remains on the weak side," said Peter Tse, a dealer at Scotia Mocatta in Hong Kong. But it would remain in range trading unless it clearly broke above the $955-$965 area, he said.
Bullion hit a six-week high of $957.10 per ounce on Thursday. But a lack of follow-through buying and resilience in the dollar capped the precious metal's rises.
"In a sense, an equities rally means we should see a much weaker dollar. But this is not the case for the last couple of days," Scotia Mocatta's Tse said.
"Even though the dollar remains on the weak side, it's not falling very rapidly. So that's why you see gold hasn't really rallied much," he said.
The recent gains in gold were mainly led by buying by speculative operators, traders said. Investment demand for gold-backed exchange-traded funds remained sluggish.
"The market has been bolstered by buying by speculative players only," said a dealer at a Japanese trading firm.
"A further gain is unlikely unless other commodities rise, for example, crude oil prices top $70 a barrel and rise higher, and invite more such buying," the manager said.
Underlining his view, noncommercial net long positions in New York gold futures jumped 9 percent to 173,302 lots in the week to July 21, a weekly report by the Commodity Futures Trading Commission showed on Friday.
Gold holdings by the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, have stayed unchanged since July 22. The holdings stood at 1,086.61 tonnes as of July 24, down 47.42 tonnes from a record marked on June 1.
