ZW: Spot Gold Firms Amid Unrest; Silver, PGMs Drop
LONDON (Dow Jones)--Spot gold continues to firm in Europe Thursday as wary investors hedge against ongoing geopolitical risks and extended gains in the oil markets.
Market participants say there was some early buying of the yellow metal, which climbed around $6 between 0700 GMT and 0930 GMT, but trade has now steadied as investors continue to eye new developments in the Middle East and North Africa.
At 1041 GMT, the spot price of gold was $1,414.15 a troy ounce, up 0.2% on the day.
The market has benefited from rising crude oil prices, with futures at their highest levels in around two-and-a-half years on the back of reduced supply from violence-torn Libya and worries of contagion in the Middle East.
"High oil prices, if sustained, will tax consumers, restrain economic activity and fuel inflation--a central banker's nightmare and a gold bug's dream," said Jeffrey Nichols, managing director of consultancy American Precious Metals Advisors.
Market players are tipping continued gains for the metal, potentially toward December's record high at $1,431.30/oz, but expect conditions to be volatile.
While one trader said all eyes have been on political troubles, he noted investors will be watching for any surprises from the January U.S. durable goods orders and weekly initial jobless claims, due at 1330 GMT, and January new home sales at 1500 GMT, which could provide a fresh catalyst for the markets.
The other precious metals traded lower--in line with base metals, which were down across the board. Three-month copper on the London Metal Exchange traded at its lowest in almost a month.
Spot silver was down 0.5% at $33.360/oz, spot platinum was down 0.5% at $1,770/oz and spot palladium was 1.8% lower at $763.75/oz.
