Gold re­gains lost ground as bar­gain hunt­ing sup­ports

The Pak Banker - - I Nternational -

SINGAPORE: Spot gold re­gained lost ground on Mon­day, as bar­gain hunt­ing trick­led in af­ter prices dropped about one per­cent in early trade in re­sponse to China's in­ter­est rate in­crease on Satur­day.

Spot gold fell to a one­week low of $1,371.10, be­fore re­cov­er­ing to $1,384.80 an ounce up 55 cents from the pre­vi­ous close.

U.S. gold fu­tures pulled back from a 0.4-per­cent de­cline to $1,386.2, up 0.4 per­cent.

"Ear­lier spec­u­la­tors were sell­ing on China's rate hike news, but a lot of buy­ing has since emerged as spec­u­la­tors are buy­ing on dip," said a Tokyo-based dealer.

Spot gold is tech­ni­cally neu­tral as it is range­bound be­tween $1,360 and $1,392 per ounce, but the bias seems to be with the bulls, Reuters mar­ket an­a­lyst Wang Tao said.

Spot sil­ver fell as much as 1.6 per­cent to a one-week low of $28.75 an ounce, and re­cov­ered to $29.24 an ounce, up 0.1 per­cent.

Spot plat­inum gained 0.7 per­cent to $1,734.50 an ounce, and pal­la­dium rose by one per­cent to $760.97, both re­vers­ing early losses.

China's cen­tral bank raised in­ter­est rates on Satur­day for the sec­ond time in just over two months as it stepped up its bat­tle to rein in stub­bornly high in­fla­tion.

"The mar­ket had been wor­ried about more tight­en­ing moves from China. Now that the news is out, it al­most came as a re­lief," said Li Ning, an an­a­lyst at Shang­hai CIFCO Fu­tures.

Com­mod­ity mar­kets pared early losses af­ter the ini­tial sell­ing-off, fo­cus­ing in­stead on pos­i­tive fun­da­men­tals and threats to sup­ply.

Ro­bust phys­i­cal de­mand in the re­gion was seen sup­port­ing the sen­ti­ment in the pre­cious met­als mar­ket.

"Some spec­u­la­tors liq­ui­dated their po­si­tions ear­lier, but we also see very good phys­i­cal de­mand in the mar­ket to­day," said Peter Fung, head of deal­ing depart­ment at Wing Fung Pre­cious Met­als in Hong Kong. -PB News

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