Gold steady near two-month high, poised for second quarterly gain

Jun 30 2014, 12:43 IST
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The metal has gained 2.4 percent in the second quarter of the year, after rising nearly 7 percent in the previous quarter. (Reuters) The metal has gained 2.4 percent in the second quarter of the year, after rising nearly 7 percent in the previous quarter. (Reuters)
SummaryThe metal has gained 2.4 percent in the second quarter of the year, after rising nearly 7 percent in the previous quarter.

Gold held steady near a two-month high on Monday on a softer dollar, and looked set to post its second straight quarterly gain as geopolitical tensions boosted the metal's safe-haven appeal.

Investors were eyeing US jobs data and the European Central Bank (ECB) meeting later this week for the outlook on stimulus measures before placing any big bets.

Spot gold was flat at $1,315.40 an ounce by 0636 GMT, not far from a two-month high of $1,325.90 hit last week.

The metal has gained 2.4 percent in the second quarter of the year, after rising nearly 7 percent in the previous quarter, helped by violence in Ukraine and Iraq.

"The technical picture for gold looks good with support at $1,300 and resistance at about $1,335," said one Hong Kong-based precious metals trader. "There is some upside from here but the big moves will be later in the week with nonfarm payroll data and ECB."

The U.S. jobs data and the ECB meeting are scheduled for Thursday, with both in focus as investors look to get clues about the strength of the global economy.

The dollar struggled to get off a one-month low against a basket of major currencies early on Monday, having posted its biggest weekly fall in over two months after a batch of disappointing US data.

Gold was also supported by escalating violence in the Middle East. Iraq's army sent tanks and armoured vehicles to try to dislodge insurgents from the northern city of Tikrit on Sunday, the second day of a pushback against a Sunni militant takeover of large stretches of Iraq.

Fighting also flared between Ukrainian forces and pro-Russian separatists around the eastern flashpoint city of Slaviansk on Sunday despite a truce extended until Monday night, a deadline also set by EU leaders considering new sanctions against Russia.

In a sign of improving sentiment, hedge funds and money managers sharply increased their bullish bets in gold futures and options to their highest since March, data from the Commodity Futures Trading Commission showed.

Other precious metals, silver, platinum and palladium were all headed for their second straight quarterly gains.

Anglo American Plc has put some of its platinum mines in South Africa up for sale as part of its $4 billion asset sale plan, Britain's Sunday Times reported.

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