• search

Gold inches up but capped as dollar sags

Written by: Staff

TOKYO, Feb 24 (Reuters) Gold inched up on Friday on light short-covering as the dollar eased against the yen after a steep fall in New York trade, but rises in gold were limited by weak technical factors and concerns over potential fund selling.

Light short-covering lifted bullion off a low of around 8 per ounce, but investors were careful about chasing prices higher as Tokyo gold futures <0#JAU:> slumped to a one-week low.

''The mood is not good after gold dipped below 0,'' said Shuji Sugata, assistant manager Mitsubishi Corp. Futures.

''There is more profit-taking interest after seeing prices being capped for the last several days.'' At 0330 GMT, spot gold was trading at 8.50/549.00 an ounce, slightly up from 8.40/549.30 late in New York on Thursday when it slipped nearly 1 percent on fund and technical selling.

It moved in a tight band of 8.00 to 8.90 in Asian hours on Friday.

The technical trend looked weak as bullion was below its short- and medium-term moving averages (MA).

Spot gold drifted below its 7-day MA of 1 and its 14-day MA of 9, after failing to hold above the 30-day MA of 6.

After hitting this week's high of 6.60 on Monday, the spot price struggled to extend gains and rises were blocked by profit-taking by funds.

The market also struggled to find reasons to take on more buy positions in gold as crude oil prices drifted from highs.

The dollar fell to a one-month low against the yen, which appeared to have helped support gold on Friday, but bearishness in the Tokyo market limited follow-through buying.

The benchmark for gold futures on the Tokyo Commodity Exchange <0#JAU:> rolled over to the February 2007 contract, which opened at 2,091 yen per gram.

By the mid-session close, the TOCOM contract stood at 2,083 yen per gram. It moved in a range of 2,069 to 2,092 yen.

The previous TOCOM gold benchmark contract was at 2,074 yen, down 28 yen or 1.3 percent from Thursday's close.

TOCOM gold was pressured by technical selling after failing to break key resistance. A stronger yen also induced selling by Japanese funds and retail investors.

''Overseas funds could be watching how Tokyo is moving to seek direction, but gold in general is lacking distinct market-moving factors now,'' Sugata said.

Further technical sales could drive spot gold down to around 5 -- the low reached last week -- but there were bullish factors as well.

Earlier this month, gold prices rose to 25-year highs on investment demand fuelled by high energy prices, perceived long-term weakness in the dollar and geopolitical tensions.

Platinum fell to ,014/1,019 an ounce from ,017/1,021 in New York.

Sister metal palladium fell to 9/284 an ounce from 3.50/287.50.

Silver edged up to .51/9.54 an ounce from .49/9.52 late in New York.


For Daily Alerts

For Breaking News from Oneindia
Get instant news updates throughout the day.

Notification Settings X
Time Settings
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Oneindia sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Oneindia website. However, you can change your cookie settings at any time. Learn more