TOKYO, Nov 16 (Reuters) - Spot gold hit a record high above
$1,126 an ounce on Monday when massive buying in U.S. gold
futures boosted bullion's appeal, but the precious metal later
fell from its peak as follow-through buying failed to materialise.
Investors maintained their appetite for gold as a hedge
against currencies as the U.S. dollar drifted lower in Asia,
extending falls from late last week.
Underlining views that a global economic imbalance is being
reflected in the weakening dollar, the head of the International
Monetary Fund said a stronger Chinese yuan is part of the reforms
that Beijing needs to implement to increase domestic consumption.
[]
Financial markets are expected to see increased rhetoric on
currencies this week from both China and visiting U.S. President
Barack Obama. [] []
News on Monday that commodities funds manager Blackrock
Investment <BLK.N> expected central banks to be net gold buyers
in 2009 also helped gold's rise, now that the precious metal is
more sensitive to bullish news than bearish news, traders said.
[]
Spot gold <XAU=> was at $1,123.20 an ounce at 0244 GMT, up
0.4 percent from New York's notional close of $1,118.50. It
earlier rose as high as $1,126.30, an all-time high.
Gold has renewed record highs for 7 days out of the past 10
sessions, during which it has risen more than 6 percent. The
previous record was $1,122.85 marked on Thursday.
U.S. gold futures for December delivery <GCZ9> stood at
$1,124.10 an ounce, up 0.7 percent from Friday's settlement. The
contract in early Asian trade reached a new record high of
$1,127.90.
"Buying soon after Asia's opening proved to be temporary,"
said Yuichi Ikemizu, Tokyo branch manager for Standard Bank,
referring to buy orders in substantial lots in early in Asia for
December gold futures at $1,127.90 per ounce.
"But the existence of bullish players who bought in such an
aggressive manner itself showed how strong the market's momentum
is," he said.
Volatility in gold prices is expected to stay relatively high
in coming days as substantial amounts of open positions remain in
U.S. December $1,200 call options, whose expiry is due later this
month.
Buying call options has been one strategy for gaining
exposure to gold.
In the currency market, the dollar's index against a basket
of major currencies <.DXY> fell 0.3 percent, with the euro
firming to $1.4945. []
The greenback fell broadly on Friday after data showed a
wider U.S. trade deficit and weaker consumer sentiment.
Spot platinum <XPT=> tracked gold's gains and rose 0.4
percent to $1,395.00 an ounce from New York's notional close of
$1,390. It earlier hit a 14-month high of $1,398.00.
On Friday platinum broke through above $1,390 for the first
time since September 2008 after news that Impala Platinum
Holdings <IMPJ.J> forecast output from Rustenburg, its main
mining area, would fall by 100,000 ounces this financial year to
850,000 ounces, due to closures over safety and a two-week
strike. []
Impala Platinum is the world's No. 2 producer of the metal
used to clean vehicle exhaust fumes and make jewellery.
Spot silver <XAG=> was up 1 percent at $17.59 per ounce.
Underling the metal's firmness, holdings by the world's
largest silver-backed exchange-traded fund hit record levels for
the second straight day on Friday.
The iShares Silver Trust <SLV> said its bullion holdings rose
30.56 tonnes, or 0.3 percent, to a record 8,954.08 tonnes as of
Nov. 13 from the previous business day. []
But interest from long-term investors in gold-backed
securities was relatively low.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings stood at 1,113.833
tonnes as of Nov. 13, down 0.61 tonne from the previous business
day. []
This marked the first fall since Nov. 5.
Precious metals prices at 0302 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1123.30 4.80 +0.43 27.63
Spot Silver 17.60 0.19 +1.09 55.48
Spot Platinum 1395.50 5.50 +0.40 49.73
Spot Palladium 356.50 3.00 +0.85 93.22
TOCOM Gold 3250.00 28.00 +0.87 26.31 40204
TOCOM Platinum 4035.00 87.00 +2.20 52.15 10733
TOCOM Silver 508.70 6.50 +1.29 59.32 176
TOCOM Palladium 1040.00 24.00 +2.36 89.09 353
Euro/Dollar 1.4943
Dollar/Yen 89.64
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Reporting by Risa Maeda; Editing by Joseph Radford)
