Singapore: Gold edged up above $1,200 (Dh4,408) an ounce on Friday as buyers helped the metal hold up against rising equity markets, paring losses fueled by worries over a looming hike in US interest rates.
A surge in gold prices to above $1,230 an ounce last week from around $1,140 a week earlier has spurred caution among investors, said Yuichi Ikemizu, branch manager at Standard Bank in Tokyo.
“People are not overly bearish anymore. They have learned their lesson when gold rallied sharply, so they’re not bold enough to go short around these levels,” he said.
Spot gold was up 0.2 per cent at $1,200.50 an ounce by 0711 GMT, after hitting a session high of $1,201.50. The gain helped cut bullion’s weekly loss to 1.8 per cent from more than 2 per cent earlier in the day.
That fall was largely on account of Monday’s 2.5-per cent drop — its deepest this year — amid worries over rising USinterest rates in 2015.
The Fed, after wrapping up a two-day meeting on Wednesday, signalled it was on track to increase rates next year, but said it was taking a patient stance, allowing gold to erase some of its losses.
Fed’s no-rush stance to withdraw stimulus from the US economy sent Asian shares to their best day in 15 months on Friday, taking their cue from a rally on Wall Street.
US gold for delivery in February gained 0.5 per cent to $1,200.40 an ounce.
“Gold prices are currently capped by a stronger dollar and ongoing weak oil prices. Equity market gains further reduce the appeal of alternative assets like gold. Despite this, gold keeps challenging the $1,200/oz level,” HSBC analysts said in a note.
In India, gold importers are offering a discount of $2 an ounce versus London prices for the first time in almost five months due to excess market supply.
Importers generally charge a premium over London prices, but demand in the world’s second-biggest gold consumer is expected to fall sharply this month after shipments surged in the past three months.
