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| Bars Gold |
Gold edged up more than half a
percent on Friday as investors used bullion to shelter from the
storm engulfing financial markets on concerns that the United
States may be facing another recession and Europe's debt crisis
is spreading to some of its largest economies.
Gold fell as much as $40 an ounce from a record high on
Thursday because investors needed to sell the precious metal to
cover losses in other asset classes, but the decline in prices
as well as tumbling equities spurred bargain hunting.
Spot gold rose 0.84 percent to $1,661.66 an ounce by
0617 GMT, having hit a low of around $1,641. Bullion struck a
record around $1,681 an ounce on Thursday before losing much of
the gains.
"I don't hear anybody saying that the bears are coming,"
said Ronald Leung, director of Lee Cheong Gold Dealers in Hong
Kong.
"The market has dropped down too much, so bargain hunters
are buying a little bit at the lower end. There doesn't seem to
be too much change in sentiment."
Japanese stocks tumbled on Friday to their lowest since the
post-quake rout in March, as investors ran for the exits after
the worsening financial crisis in Europe compounded a weak U.S.
economy that has come close to stalling.
In the physical market, premiums for gold bars were steady
at 50 cents to $1 to spot London prices in Hong Kong, while in
Singapore, the value was little changed at around 80 cents.
"Investors are more interested in playing the spread now.
They are buying gold at around $1,640s and selling it at around
$1,650s. I do see physical demand from jewellers, although the
amount is not big," said a dealer in Singapore.
"Premiums are still unchanged at 20 to 80 cents, depending
on the brand."
In Tokyo, gold bars were at a discount of 50 cents to spot
London prices as investors sold bullion to cover losses in other
markets.
Bullion prices have risen more than 15 percent this year.
The need for investors to book those profits and boost liquidity
may force prices lower in the next few days.
"Bullish sentiment in gold could be tempered as wary
short-term investors look to take profits," said Ong Yi Ling, an
investment analyst at Phillip Futures.
"Investors will be watching the all-important non-farm
payrolls data that we will be getting today and whether the
figures turn up worse than expected. It seems everyone is
bracing for the worst."
U.S. economic data suggests growth in the world's largest
economy was slowing from what was already a sluggish pace even
before politicians agreed budget cuts. Investors await data
later on Friday on U.S. jobs growth for July, which may show the
impact of the political stand-off on debt.
Europe's debt crisis is threatening to swallow two of the
continent's largest economies, Italy and Spain. European
policymakers tried to turn a more powerful fire hose on the euro
zone debt crisis on Thursday but financial markets were
unimpressed with their response.
With few other places to go the metal still looks attractive
to investors trying to maintain the value of their capital.
Citing enhanced contagion risk from the European debt
crisis, Morgan Stanley lifted its 2011 gold price forecast to
$1,511 an ounce from $1,401 and raised this year's silver price
forecast to $36.21 an ounce from $31.39.
U.S. gold futures GCcv1 also rebounded from lows and rose
$6.4 an ounce to $1,665.4 an ounce -- still off Thursday's
record around $1,684 an ounce.
Oil fell sharply on Friday, heading for its biggest weekly
drop in three months, after fears of an economic slowdown drove
investors to the exits in a commodities sell-off.
London copper futures extended losses on Friday, falling
more than 2 percent to their lowest since late June as mounting
worries over a stalling U.S. economy and a widening debt crisis
in Europe pushed investors out of riskier assets.
Precious metals prices 0617 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1661.66 13.76 +0.84 17.06
Spot Silver 39.27 0.46 +1.19 27.25
Spot Platinum 1696.00 -21.80 -1.27 -4.05
Spot Palladium 728.98 -12.20 -1.65 -8.82
TOCOM Gold 4204.00 178.00 +4.42 12.74 146620
TOCOM Platinum 4321.00 -160.00 -3.57 -7.99 32750
TOCOM Silver 99.10 1.30 +1.33 22.35 2427
TOCOM Palladium 1867.00 -203.00 -9.81 -10.97 1154
COMEX GOLD DEC1 1631.20 15.00 +0.93 14.76 136930
COMEX SILVER SEP1 40.11 0.31 +0.78 29.63 44407
Euro/Dollar 1.4092
Dollar/Yen 78.59
TOCOM prices in yen per gram. Spot prices in $ per ounce.
COMEX gold and silver contracts show the most active months
SOURCES : http://www.reuters.com/article/2011/08/05/markets-precious-idUSL3E7J501S20110805
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