Gold rises, Mideast unrest lends support
LONDON: Gold prices rose 1 per cent on Wednesday amid broad support from unrest in the Middle East and North Africa, with investors cheered by the metal's early recovery from four straight sessions of losses.
Gains were capped by expectations monetary policy in key regions may tighten, however, analysts said.
Spot gold was bid at $1,424.70 an ounce at 1407 GMT against $1,415.95 late in New York on Tuesday, having earlier touched a high of $1,430.00. US gold futures for April delivery rose $8.30 an ounce to $1,425.40.
"(Gold) held well technically (over) the last couple of days and there has been reasonable physical support around as well," said Simon Weeks, head of precious metals at the Bank of Nova Scotia. "Overall it is still rangebound, but dips are there to be bought."
The precious metal hit a record $1,447.40 an ounce last week after months of unrest across North Africa and the Middle East, with violence continuing to simmer in Libya, Bahrain, Syria and Yemen.
"Gold players are anxiously waiting for policy signals from the US and to see what the ECB (European Central Bank) actually does next week in its monthly meeting," said Credit Agricole analyst Robin Bhar.
"It would take an extraordinary event for the ECB not to hike, and in the US tightening rather than keeping this accommodative bias (is likely). Those two factors do put a non-interest bearing asset like gold at a disadvantage."
"Geopolitical (risks), elevated oil prices, the debt situation in the euro-zone will continue to provide support, so there is a floor for gold," he added. "(But) unless any or all of those factors increase in gravity, it is difficult to see what trigger from the buy side will push gold back to highs." Silver was bid at $37.55 an ounce against $37.07. Platinum was at $1,755.24 an ounce against $1,734.45, while palladium was at $752.72 against $748.28. -Reuters