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LONDON, Oct 9: The price of gold slipped silently in European trading on Tuesday, but traders said fears of escalation of the Afghanistan situation would keep the metal above support at $290 an ounce.
The safe-haven premium which is attached to gold in times of crisis has also eased, with investors considering alternative safety nets such as currencies or treasury bonds, analysts said.
If you are looking for gold as a safe haven, you look for it in times of panic, not weeks after the event, said Howard Pattern, analyst at Barclays Capital.
The market barely flinched, appearing little fazed by a second round of US air strikes against targets in Afghanistan on Monday.
Repercussion fears are supporting the market. There was a small rise yesterday, but with everything as expected the market will drift until something happens, one trader said.
Gold opened on Tuesday at $291.40/291.90 a troy ounce, down from $291.65/292.65 at Monday’s close in New York. Spot gold was indicated weaker at $290.75/291.75 a troy ounce.
NEW YORK: Gold ended higher in New York on Monday in a restrained flight to safe haven after the second night of long-anticipated retaliation against Taliban targets in Afghanistan failed to seriously rattle US financial markets.
COMEX futures seesawed in thin trade after the United States and Britain on Sunday conducted bombing raids and missile attacks against Taliban targets.
Benchmark December gold initially rallied more than $3 in response to the first raids Sunday but was squelched as jitters on Wall Street abated and stock investors started to test the water again.
There’s a war. If a war didn’t rally this, God knows what will, said Frank Bulfamante from the gold desk of Custom Floor Brokers.
The contract blipped up again in the last hour of trade on news of the second series of salvos, ending 90 cents firmer at $293.40 an ounce, trading from a high of $295.90 to $292.10.—Reuters
