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| Gold trades near trough on dollar gain speculation |
| Bloomberg / Aug 12, 2009, 00:23 IST |
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Gold traded near the lowest this month on speculation that the dollar will continue to advance on data pointing to a recovery in the US jobs market.
Bullion touched $943.50 an ounce yesterday, the lowest level price since July 31, as the Dollar Index, a six-currency gauge of the greenback’s strength, extended a rebound from a 10-month low.
The US economy may have bottomed out on stimulus spending, Nobel Prize winner Paul Krugman said on August 9. Data last week showed the pace of US job losses slowed and the unemployment rate fell for first time in more than a year.
“I don’t think the prices are firming up this week, but we wouldn’t see prices falling backward too much either,” said Gavin Wendt, a senior resources analyst with Fat Prophets Funds Management in Sydney. “At the moment the main issue is some positive data coming out of the US which has a positive impact on the US currency.”
Gold for immediate delivery traded up 0.1 per cent at $947.63 an ounce at 3.52 pm in Singapore. The metal is up 7.4 per cent this year.
The precious metal would receive support from an agreement among European central banks to a third five-year cap on gold sales, Wendt said.
The European Central Bank and 18 other banks agreed to sell no more than a combined 400 tonnes of the metal a year through September 2014. That’s less than the annual cap of 500 tonnes in the current agreement, which expires September 26.
Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, fell 0.35 tonnes to 1,068.55 tonnes as of August 10, according to figures on the company’s website.
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