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SINGAPORE, JANUARY 28: Gold edged up in Asia on Friday due to buying interest at lower levels and looked set to track the fortunes of the US dollar ahead of elections in Iraq and key economic events next week, dealers said.
Fears of escalating violence in Iraq before Sunday's elections, next week's State of the Union address by President George W Bush and the Group of Seven nations' meeting were likely to buoy gold's position as a safe-haven asset, they said.
Spot gold was quoted at $426.75/427.50 an ounce by 0601 GMT, compared with $425.70/426.50 late in New York and London's Thursday afternoon fix at $424.50 an ounce. Gold had touched a low of $425.80 an ounce in Asia.
In Tokyo, the benchmark December gold futures contract lost four yen per gram to 1,423 yen.
Dealers said the G7 meeting and a Federal Reserve interest rate decision next week would be key to the near term direction of the dollar. A sinking dollar had pushed up gold to a 16-1/2-year high of $456.75 an ounce in December.
Leon Lee, a dealer officer at the Bank of China in Hong Kong, said gold would find good physical support at $425 an ounce. He pegged resistance at $428 an ounce.
"If it breaks the resistance, (gold) will go higher to $430," said Lee.
The euro was at $1.3031, versus $1.3045 in late US trade. The dollar had rallied in New York due to a solid rise in US durable goods orders in December and a less-than-expected increase in US jobless claims.
SILVER PREMIUMS STEADY
Dealers in Singapore still reported some demand from jewellers ahead of the Lunar New celebration in early February but buying interest had subsided in Hong Kong, a key bullion trading city in East Asia.
"It looks like the demand will slow down with the Chinese New Year getting closer," said Ellison Chu, a senior manager at Standard Bank London in Hong Kong.
But Chu noted active buying in silver, which is used in jewellery, electronics and photography.
"Silver still has strong demand this days. (Demand) is from everywhere," he said.
Silver was at $6.78/6.80 an ounce, versus $6.78/6.81 in late US trade.
Silver has fallen nearly 17 per cent in value since hitting an eight-month high of $8.15 an ounce on Dec 2.
Dealers said premiums for silver to London spot prices were steady at up to 3 US cents an ounce in Hong Kong.
In other precious metals, platinum was at $867/872 an ounce, versus $865/870 in New York. Sister metal palladium was unchanged at $188/193.
On Hong Kong's Chinese Gold and Silver Exchange, tael gold was quoted at HK$3,965 by the midday break, compared with an opening HK$3,962. |