LONDON, Jan 30: Gold traded in a narrow range below recent 25-year highs on Monday, possibly destined higher on the back of firm energy prices and dollar instability. Silver clung near its 19-year peak on hopes of the launch of an exchange-traded fund while platinum prices rose to match Friday’s record high on continued buying by investment funds, dealers said.
The gold market was relatively quiet with many Asian markets shut for Lunar New Year but activity was seen picking up in European and US trading sessions.
The outlook looks very positive for gold because we keep finding ourselves testing the highs rather than testing the lows, said David Holmes, vice president of commodities at RBC Capital Markets.
I wouldn’t be surprised to see the market on the upside this week ... the geo-political backdrop is pretty supportive, he said referring to the Hamas victory in the Palestinian elections and the situation in Iran.
Gold was quoted at $559.90/560.65 an ounce by 1104 GMT, compared with $559.20/560.10 in New York late on Friday and this month’s $567.60, the highest since January 1981.
Tokyo gold futures rallied on Monday after a weaker yen prompted aggressive buying by funds and retail investors.
Benchmark Tokyo Commodity Exchange (TOCOM) gold futures rose to 2,163 yen per gram — the highest since December 1987 — surpassing the closely watched level of 2,155 yen, which was the previous 18-year high reached on Dec. 12.
Silver bounced from New York levels and might test the 19-year high of $9.76 hit on Friday when funds poured money into the metal on speculation that the ETF might spur demand.
Although the silver ETF story will continue to attract interest and speculation during the early part of the week, we would expect to see a less volatile trading week ahead, Standard Bank said in a report.
Barclays Global Investors said last week its silver-backed security — iShares Silver Trust — appeared to move a step closer to approval after the US Securities and Exchange Commission issued a filing about its potential listing on the American Stock Exchange.
Each share would be worth 10 ounces of silver. The security would require the purchase of silver bullion to guarantee it.
Exchange traded funds, aimed at drawing investment capital, are designed to reflect the price of specific goods and trade like listed stocks on any exchange.
Spot platinum eased to New York’s level of $1,064/1,068 an ounce after matching Friday’s highest-ever price of $1,065. Palladium was $1 up at $273/$277 an ounce. —Reuters