Gold little moved in Europe

Published August 9, 2005

LONDON, Aug 8: Gold prices drifted down in London on Monday, tracking range-bound currency markets, although analysts said funds had scope to buy more. Spot gold was at $436.60/437.40 an ounce, down modestly from New York’s late quote on Friday at $437.60/438.30.

Prices have gained some 4.5 per cent since their low point in mid-July, culminating in a five-week high at $439.10 late last week. Alan Wiliamson of HSBC Bank said the move was all the more impressive given relatively light fund buying over the past month.

Data released on Friday showed a small increase in the net long speculative position in New York gold futures in the week to August 2. It rose to 10 million ounces from 8.3 million. This was the first increase in the net long position in five weeks and still leaves the fund position below the 12-month average of 11.4 million ounces, Williamson said in a report.

He added this should ensure the recent gains were more sustainable, although gold’s performance would remain tightly linked to the euro/dollar. Traders said business remained very subdued due to thin August trade.

The euro hit a two-month high around $1.2400 last week, but was slightly down at $1.2384 on Monday.

Financial markets are turning their attention to interest rates policy in the United States. The Federal Reserve is expected to deliver its 10th straight 25 basis point increase in its funds rate at a meeting on Tuesday, taking it to 3.5 per cent.

Gold was showing little reaction to a strike by some 100,000 South African gold miners in the country’s first industry-wide strike in 18 years to demand higher wages. A period of consolidation around $430-40 would help build a base for gold to push towards $445-50, he said.

Gold peaked at $446.70 in March and has tried and failed three times this year to climb back to a 16-1/2-year peak scored late in 2004 at $456.75.

Platinum lost further ground as a wave of fund buying subsided, dipping as low as $897 — some two per cent off last Thursday’s 15-month peak. Spot was last at $900.00/903.00 an ounce, down from New York’s $908.00/911.00.—Reuters

Opinion

Editorial

IMF package
Updated 28 Jan, 2023

IMF package

While it is crucial to seek immediate IMF funding to shore up its reserves, the govt shouldn’t focus only on short-term relief.
Dar unpegged
28 Jan, 2023

Dar unpegged

IT is over. Nearly four months after Ishaq Dar descended on the cash-strapped economy with some decidedly outlandish...
Lurking hazards
28 Jan, 2023

Lurking hazards

OVERSIGHT of illegal industrial activity occurring within residential areas in the country is weak, especially in...
Election time
Updated 27 Jan, 2023

Election time

There are concerns whether the ECP will be sufficiently able to protect the integrity of elections if they are held under partisan governments.
SCO invite
27 Jan, 2023

SCO invite

THOUGH India’s invitation to Pakistan to attend the Shanghai Cooperation Organisation events in Goa later this ...
Call to arms
27 Jan, 2023

Call to arms

ONE way the state abdicates responsibility in Pakistan is by farming out its functions to the private sector. In ...