Gold Steadies as Lower Prices Tempt Buyers


 
Gold prices steadied Monday, having earlier fallen in line with the Euro, stocks and other commodities like Crude Oil, as buyers were tempted back to the market by the metal's retreat towards 1,760 oz.
Spot gold was at 1,770.09 oz at 1439 GMT against 1,772.19 late Friday, having earlier slipped as low as 1,761.76 oz. US Gold futures for April delivery were down 6.00 oz at 1,770.40.
 
The metal has risen more than 13% so far this year and analysts are upbeat about its prospects on expectations that monetary policy will remain loose in key economies, cutting the opportunity cost of holding non-yielding bullion.
 
The precious metal struggled to maintain traction above 1,780 oz last week after rising more than 3%, its best weekly performance since late January.
 
It remains under some pressure from losses in other assets. Shares fell Monday and the euro slipped 0.6% against the USD  as investors worried about energy costs hurting global growth, and after the Group of 20 leading economies told Europe it must commit more money to fight the debt crisis before seeking their help.
 
The debt crisis that has engulfed the EuroZone in recent years was initially positive for gold, fueling interest in the metal as a haven from risk. In recent months better news on the crisis has benefited Gold as it tracks the Euro higher, although the relationship remains patchy.
 
Recent upward momentum in oil prices, which rose to 10-month highs Friday on the back of the Iran crisis, has also raised concerns over economic growth, analysts said. Prices fell more than $1.00 Monday as investors cashed in gains.
 
Gold's retreat from 10-wk highs fueled a demand recovery in major consumer India, a notoriously price-sensitive market, Monday. "Gold is slightly off last week's high, a Rupee close to 49.00 (is) attractive and the market's view is for prices to further go up," said a dealer with a private bank in Mumbai.
 
But dealers in Tokyo said supply of scrap gold to the market rose after Japanese-yen denominated Gold rose to its highest since last September, with monetary easing measures from the Bank of Japan pressuring the yen.
 
In New York, money managers, including hedge funds and other large speculators, raised their bullish bets in gold to the highest level in five months during the week of 21 February, as prices snapped back from their February lows, US Commodity Futures Trading Commission (CFTC) data showed.
 
Among other precious metals, silver was down 0.3% at 35.18 oz. Spot Platinum was down 0.5% at $1,699.49 an ounce, while spot palladium was down 1.2 percent at $701.22 an ounce.
 
South Africa's Impala Platinum (J:IMPJ) is to rehire thousands of miners sacked for an illegal strike that has halted production for more than a month at the world's biggest platinum mine, a leading union said on Saturday.
 
The strike fueled a near 5% rally in Platinum prices last week, taking them to their highest since September at 1,731.50 oz.