Gold flat; platinum snaps seven-day rally

  • Share via facebook
  • Tweet this
  • Bookmark and Share

Gold traded flat on Thursday as investors, concerned about the duration of ultra-loose monetary policy, refrained from betting big on an economic recovery while easing concerns about immediate supply shortages from South Africa clipped platinum's seven-day rally.

Economic activity gathered steam across the United States in recent weeks, although businesses and consumers were wary due to uncertainty over fiscal policy and conditions in Europe, the Federal Reserve said in its Beige Book report.

Earlier this month, Fed meeting minutes showing concerns about the side effects of monetary stimulus hammered gold prices, as an exit from the loose monetary policy would tarnish the metal's shine as an inflation hedge during a period of rampant central bank cash printing.

"If growth continues to be really good, it could shift central banks' bias from easing to tightening, which would not be good for the precious metals complex," said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong.

But the US debt ceiling issue, which would force the world's top economy to default on its debt as early as mid-February if lawmakers fail to agree to raise the borrowing limit, might support gold's safe have appeal, he added.

"Right now the market isn't sure which direction to go," said Friesen.

Gold investment, fuelled by negative real interest rates and debt concerns, is expected to drive prices to a record average high this year, according to Thomson Reuters GFMS.

Spot gold was flat at US$1,678.64 an ounce by 0305 GMT, trapped in a tight range of about US$2.

US gold inched down 0.3 percent to US$1,678.80.

Technical analysis suggested that spot gold has abandoned the bullish target at US$1,701 an ounce as it failed to maintain the momentum, said Reuters market analyst Wang Tao.

Physical buying interest ebbed in Southeast Asia, dealers said.

"Buying has slowed as prices are once again locked in a range," said a Singapore-based dealer.

Spot platinum lost 0.6 percent to US$1,673.75 , pulling away from a three-month high of US$1,699.50 hit earlier in the week.

Anglo American Platinum (Amplats) miners will end an illegal walkout from Wednesday night and want talks to prevent further action, a labour leader said.

Potentially tempering the sentiment in platinum, demand for new cars in recession-bound Europe fell to a 17-year low in 2012, leaving mass market manufacturers little hope for this year as they try to cut costly excess factory capacity and aggressive discounting dents their margins.

Platinum usage in Europe's automobile industry accounted for 18 percent of the world's total demand for the metal in 2011, data from refiner Johnson Matthey showed.

Spot palladium inched down 0.4 percent to US$718.75, easing from a near 16-month high of US$724.50 hit in the previous session.   

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Features & Analysis
Petroleum producers shift attention from Middle East: Kemp

Petroleum producers shift attention from Middle East: Kemp

Following four decades of war, sanctions, nationalisation and...

Gold industry shifts east as Dubai plans huge refinery

Gold industry shifts east as Dubai plans huge refinery

$60m refinery being built by Kaloti Precious Metals in Dubai...

Dubai gold dealers shun Turkish bars on fear of links to Iran

Dubai gold dealers shun Turkish bars on fear of links to Iran

Trade in Turkish gold bars to Iran via Dubai is drying up as...

2
Most Discussed
  • 24
    World's most pierced man refused entry to the UAE

    Tolerance has its limits everywhere including Dubai and those who considered Dubai a lawless circus were held accountable...so thank you Dubai authorities... more

    Thursday, 21 August 2014 10:51 PM - Khalil
  • 23
    Baby NOT on board?

    Some of you cry babies need to get your own personal apartments on the plane ! You cry more then the babies I have seen in my travels. LOL more

    Thursday, 28 August 2014 9:10 AM - Jim
  • 21
    Israel “must be punished” over Gaza, says Dubai police chief

    This high moral ground that Mick is talking abt sound very familiar. May I remind Mick that the US & its British ally alone killed over 1 million innocent... more

    Thursday, 7 August 2014 4:12 PM - Mathew