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February 03, 2007
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Saturday
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Muharram 14, 1428
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Gold closes lower
LONDON, Feb 2: Gold failed to sustain the previous day's rally on Friday as investors took profits ahead of a US payrolls report that may affect the dollar and set the metal's direction, dealers said.
Spot gold slipped to $655.60/656.60 an ounce by 1103 GMT from a six-month high of $661.50 on Thursday, when it closed at $657.00/657.40 in New York dealings.
“I am a bit concerned. If it breaks $653, you could see abreak down to the $650 level and then a quick move towards low $640s,” said a precious metals dealer in London.
But longer term, I am still fairly friendly towards the market. I think there is a chance it could move higher, he said, adding increased buying by investment funds and physical purchases ahead of the Chinese New Year might support gold.
The Lunar New Year begins in mid-February. Dealers said that despite sentiment remaining bullish after a key technical level of $655 was broken, gold would have to rise above $670 to sustain the uptrend. They said the dollar might set market tone in the near term.
The dollar was steady against major currencies ahead of the jobs data, due at 1330 GMT.
Gold often moves in the opposite direction of the dollar and is generally seen as a hedge against oil-led inflation.
In Southeast Asia, sales of scrap picked up as jewellers and investors took advantage of higher prices, putting pressure on premiums for gold bars in Singapore.
Premiums for gold bars dropped to 30 US cents an ounce to the spot London price in Singapore from 50 cents two weeks ago.
Even if I offer a discount, there won't be much buying interest, said Ganesh Agarwal of Shiv Sahai & Sons, a gold dealer based in the southern part of India.
In other metals, silver was at $13.61/13.68 an ounce, against $13.62/13.69 in New York on Thursday, when it rose to $13.75 -- its highest since mid-December.
Platinum fell to $1,171/1,176 from $1,182/1,187 an ounce and off Thursday's two-month high of $1,189 an ounce. Palladium declined $5 to $336/340 an ounce.
—Reuters
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