🎁 💸 Warren Buffett's Top Picks Are Up +49.1%. Copy Them to Your Watchlist – For FreeCopy Portfolio

PRECIOUS-Gold bounces after 1 pct fall; jewellers buy

Published 06/13/2011, 11:53 PM
Updated 06/13/2011, 11:56 PM
HTG
-
PMC
-
GC
-
SI
-
PA
-
PL
-
GLD
-
SLV
-

* Gold rises after posting biggest 1-day loss in a month

* Coming Up: U.S. PPI inflation yy; 1230 GMT (Updates prices, adds quotes)

By Lewa Pardomuan

SINGAPORE, June 14 (Reuters) - Gold rebounded on Tuesday after posting its biggest one-day loss in a month in the previous session on growing worries about another global economic downturn, but a weaker U.S. dollar and bargain hunting by jewellers offered support.

While signs of a cooling Chinese economy could weigh on industrial metals, dealers expect no change in China's appetite for bullion. Investors were also awaiting a trail of U.S. data later in the day which could set the tone for commodities.

Gold added $4.40 to $1,519.13 an ounce by 0319 GMT after falling on Monday to its weakest since late May. Gold, which hit a record around $1,575 in early May, has been buoyed by uncertainties about the outlook for the U.S. economy and worries about euro zone debt.

"I would say gold is still bullish. The main factors are still going back to the monetary policy of the U.S. and the longer-term weakness of the dollar. That could boost gold prices and help it head towards a new record later this year," said a dealer in Singapore.

"The demand for gold in China is going to come pretty robust this year. Despite the slowing economic growth, I think the Chinese will continue to consume quite a bit of gold," he said.

China's consumer price inflation accelerated to a 34-month high of 5.5 percent in the year to May from 5.3 percent in April, fueling fears of further tightening and adding to risks for global growth.

But Chinese demand for gold bars and coins as private investments could push bullion imports above 400 tonnes in 2011, triggered by concerns about inflation and poor returns in the stocks and property sectors.

The United States will release key data on Tuesday, including retail and auto sales, and producer prices, which the market will scour for clues to the magnitude and duration of the slowdown in the world's largest economy.

U.S. economic growth could remain soft for some time but monetary policy may not be able to address the problem, Richmond Federal Reserve Bank President Jeffrey Lacker said. [ID:ID:nN13119048]

Gold's recent fall spurred activity in the physical sector.

"We're seeing a little bit of physical buying. It's from jewellery makers," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

"I think we can say gold will try the lower end first, and then maybe $1,480 should be a good support. Starting in August or September, there maybe room to go up again."

The euro fell to a record low against the Swiss franc as investors sought safety on worries about a possible Greek debt default, while concerns about the faltering U.S. economy and slowing Chinese growth kept prices across markets under pressure.

On Monday, Standard & Poor's slashed Greece's rating to CCC, making the highly-indebted country its lowest-rated in the world. S&P said European policymakers look increasingly likely to impose a restructuring of Greece's debt.

"Now that the euro zone has its problems, the U.S. has its budget deficit, I think Swiss franc is one of the safe havens that investors would look towards. But I would not see Swiss franc as competing with gold per se," said the dealer in Singapore.

"It would be competing with other currencies."

Silver , which usually tracks gold, rose 30 cents to $34.99 an ounce, below a record at $49.51 an ounce hit in April.

Holdings of the largest silver-backed exchange-traded-fund (ETF), New York's iShares Silver Trust , fell 2.1 percent from Friday to Monday, while the largest gold-backed ETF, New York's SPDR Gold Trust saw its holdings dip 0.08 percent during the same period.

In the energy market, oil rebounded after China said industrial production grew at a faster-than-expected pace in May, easing concerns over a global economic slowdown and soothing worries that Europe's debt crisis would dent energy demand.

Precious metals prices 0319 GMT

Metal Last Change Pct chg YTD pct chg Turnover Spot Gold 1519.13 4.40 +0.29 7.02 Spot Silver 34.99 0.30 +0.86 13.38 Spot Platinum 1800.49 9.24 +0.52 1.87 Spot Palladium 797.47 7.69 +0.97 -0.25 TOCOM Gold 3927.00 -38.00 -0.96 5.31 57921 TOCOM Platinum 4699.00 -66.00 -1.39 0.06 12924 TOCOM Silver 90.50 -2.40 -2.58 11.73 1439 TOCOM Palladium 2064.00 -24.00 -1.15 -1.57 308 Euro/Dollar 1.4417 Dollar/Yen 80.21 TOCOM prices in yen per gram. Spot prices in $ per ounce. (Editing by Himani Sarkar)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.