By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — Gold futures edged higher in electronic trading Monday, as a weaker dollar supported investment, despite rising risk appetite flowing through to other asset classes.
Gold for December delivery GC1Z -0.08% gained $2.40, or 0.1%, to $1,745.00 an ounce on the Comex division of the New York Mercantile Exchange during Asian trading hours.
Gold prices have risen by nearly 10% over the past month as concerns about the strength of the global economic recovery have boosted the safe-haven investment appeal of the metal.
But Ong Yi Ling, investment analyst at Phillip Futures in Singapore, said the sharp run-up in prices is unlikely to be repeated this week.
“Markets are generally calmer at the start of this week. You could see some bargain hunters start to buy risk assets at cheap valuations, and that could temper some safe-haven flows into gold,” Ong said.
“Short-term, there is potential for gold to move lower, before the longer term buyers come back. Last week, gold headed up very fast, within a short time. As markets become calmer, then it’s back to equities, and back to risk assets,” she said.
Ong said that “strong buying interest from Shanghai after the market open ... helped gold to pare its losses” on Monday.
Better-than-expected Japanese gross domestic product and U.S. retail sales data helped buoy sentiment and push Asian equity markets higher on Monday, rebounding from a week of heavy losses. Read more about Asian markets.
Gold traders are also awaiting the quarterly Securities and Exchange Commission 13-F filings which require hedge funds to disclose their holdings, Ong said. The filings are due to be lodged later Monday.
“That will shed some light on the ... investment trends of what is held by these hedge funds,” Ong said.
“For gold investors, they will be watching the holdings of John Paulson, who is currently the biggest owner in the SPDR gold trust,” she said.
In May, Paulson & Co. disclosed holdings of 31.5 million shares in SPDR Gold Trust GLD -0.46% .
On the supply-side, Australian gold miner Newcrest Mining Ltd. AU:NCM -0.81% NCMGY -1.37% reported a 63% jump in fiscal-year statutory profit on Monday, helped by the surging gold price, with sales of gold more than doubling during the period. Read more on the Newcrest Mining result.
Silver down, copper up
The wider complex traded higher in electronic trading Monday, with only silver bucking the broader trend.
Silver for September delivery SI1U -0.36% lost 13 cents, or 0.3%, to $38.98 an ounce.
September copper HG1U +1.08% added 3 cents, or 0.9%, to $4.05 a pound.
In terms of copper, analysts at Citigroup forecast “bouts of weakness as sovereign-debt concerns flare, and Chinese consumers will use these bouts of weakness to re-stock” over the next 12 months.
“The knock to confidence from the euro-zone sovereign-debt crisis and the U.S. rating downgrade, and the impact of fiscal contraction in many Organization for Economic Co-operation and Development [OECD] nations, is likely to delay both consumers making big-ticket purchases and business hiring and business investment,” the analysts said.
Platinum and palladium advanced, with October platinum PL1V +0.08% adding $1.50, to $1,798.20 an ounce. September palladium PA1U +1.04% rose $6.80, or 0.9%, to $755.00 an ounce.
The dollar declined during Asian trading hours, which tends to support investment in dollar-priced commodities such as metals, as it makes the assets more affordable to holders of other currencies.
The dollar index DXY -0.25% , which measures the performance of the greenback against a basket of six rival currencies, slipped to 74.452, from 74.594 in North American trade late Friday. Read more on currencies.
Virginia Harrison is a MarketWatch reporter based in Sydney.
