Gold steady but quickening fund outflows put prices at rise

May 22 2014, 10:24 IST
Comments 0
SummaryGold held steady on Thursday but was at risk of dropping as holdings in the top bullion-backed fund fell the most in three weeks to a fresh five-year low.

Gold held steady on Thursday but was at risk of dropping as holdings in the top bullion-backed fund fell the most in three weeks to a fresh five-year low.

Investors were also eyeing US data to be released later in the day for a break from the narrow trading band over the last few sessions, with prices unable to close above $1,300 or below $1,290 an ounce.

"The trading ranges are getting narrower but a breakthrough isn't very far away," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.

"The $1,300 level is still going to be the anchor and some long positions can be built under that level," he said.

Spot gold was firm at $1,292.00 an ounce by 0336 GMT, after closing between $1,291 and $1,296 in the last five trading sessions.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 3.3 tonnes to 776.89 tonnes on Wednesday - the lowest since December 2008.

The outflows are the biggest since April 30.

The fund is considered a good measure of investor sentiment and is likely to influence prices due to the size of its holdings. Minutes from the Fed's April policy meeting showed that policymakers in the US central bank began to lay the groundwork for an eventual retreat from their extraordinarily easy monetary policy with a discussion of the tools they could employ to accomplish the task, with no final decisions taken.

In the physical markets, India's central bank eased tough gold import rules on Wednesday by allowing seven more private agencies to ship the precious metal, a move that industry officials say could augment supplies and reduce premiums in the peak wedding season.

India is the second biggest gold buyer after China.

Among other precious metals, platinum added to gains on supply fears as strikes in major producer South Africa dragged on for a 17th week.

Palladium was steady after climbing to a 2-1/2-year high in the previous session.

Ads by Google
Reader´s Comments
| Post a Comment
Please Wait while comments are loading...