Gold rises, Mideast un­rest lends sup­port

The Financial Daily - - MARKET SUMMARY -

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

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