Data provided by McGregor BFA
All data is delayed
Loading...
See More

Gold heads for big gain despite fall

Jul 12 2013 13:51 Reuters

(Shutterstock) (http://www.shutterstock.com)

Related Articles

Gold climbs to a more than two-week high

Gold extends gains on demand from China

Gold holds near 1-wk high on Fed

Gold sector pay talks begin

Gold inches higher as markets eye Fed

Gold steady after Fed decision

 
Singapore - Gold eased on Friday after four days of gains but was still on track for its biggest weekly gain in nearly two years on easing fears of an early end to US monetary stimulus that has boosted bullion's appeal as a hedge against inflation.

Bullion has lost nearly a quarter of its value this year on concerns of an early tapering of the US Federal Reserve's $85bn monthly bond purchases. Fed Chairman Ben Bernanke confirmed the fears in June, saying the rollback could start later in the year.

But Bernanke on Wednesday suggested the bond purchases could last longer. And minutes from a June Fed meeting showed officials were divided over when to end the stimulus.

"A lot of folks out there had been talking about Fed buying less bonds starting from this September. That's why the Fed minutes really caught everyone off guard," said a precious metals trader in Hong Kong, adding that the tapering could now be pushed to next year.

Spot gold fell 0.1 percent to $1,283.34 an ounce by 0418 GMT. Bullion has gained about 5 percent so far this week, on course for its biggest weekly climb since October 2011 when it rose 6.2 percent.

Comex gold and silver were trading near multi-week highs hit on Thursday.

Gold's small dip came after China's finance minister said he expects the country's economic growth for 2013 to come in at 7 percent, the official Xinhua news agency reported on Friday. The official growth target for the year is 7.5 percent.

"China is a concern but right now the market seems to place more weight on the timing of Fed's QE tapering. I think we could challenge that $1,300 mark again tonight," the trader said, referring to quantitative easing.

Spot gold hit a high of $1,298.36 on Thursday - its highest in nearly three weeks. Technicals suggest that gold could face difficulty in crossing the $1,300 level, analysts said.

"Based on a purely technical basis, we view it as more likely for prices to ease," Phillip Futures analysts wrote in a note.

"The resistance at $1,300 is a strong one and prices have already shown great difficulty in breaking through."

Spot gold is expected to retrace to a support of $1,273 per ounce, as it failed to break the $1,302 resistance, Reuters technicals analyst Wang Tao said.

Many still expect gold to end lower this year as investors jump to rallying stocks, dumping holdings in gold-backed exchange traded funds, and physical demand slows.

Investors pulled $998.8 million from commodities and precious metals funds, up from withdrawals of $92.6 million in the prior week, data from Thomson Reuters' Lipper service showed on Thursday.
Word Count: 451

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

gold
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're Talking About: Small Business

Standard Bank is looking for 12 entrepreneurs to participate in a 10-part TV series. They could win a R1m investment into their dream.
 
 

No DA, EFF coalition

The DA and the EFF have denied reports of a possible coalition between them after the 7 May elections.

 
 

Latest elections multimedia

DA won't get 30% - Zille
The EFF's ad was banned, see why
Why Jack Parow wants you to vote on 7 May
The ad the SABC doesn't want to air

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...