Gold Heads for Biggest Monthly Gain Since July
February 28, 2014 8:03 PM EST
Gold was little changed on Friday but was on track for its biggest monthly gain since July after investors and speculators chased prices higher on concerns about the pace of the U.S. economy and unrest in Ukraine.
Gold Demand Fell 15 Percent in 2013 - WGC
Recent gains, though, may be hard to sustain in the absence of strong physical buying. And expectations of the U.S. Federal Reserve continuing to reduce its stimulus programme could dent gold's appeal as a hedge against inflation.
Cash gold was nearly flat at $1,330.86 an ounce by 0714 GMT, down from a four-month high of $1,345.35 struck on Wednesday. Gold has gained 7 percent in February, its biggest monthly rise since the 7.2 percent added in July.
"The physical market in Hong Kong is still very slow and I can't see any fresh buying interest," said Peter Fung, head of dealing at Hong Kong's Wing Fung Precious Metals.
"Sentiment in the market is neutral from here. Resistance is at $1,350, while on the downside, $1,300 should be the support," Fung said.
Premiums for gold bars in Hong Kong dipped to $1 an ounce to
Weakening differentials between 99.99 percent purity gold on the Shanghai Gold Exchange and cash gold discouraged imports. On Friday, the Shanghai market was trading at discounts to almost on par with cash gold.
U.S. gold was also little changed at $1,331.40 an ounce.
Unusually harsh winter weather appears to be behind recent signs of weakness in the U.S. economy, Federal Reserve Chair Janet Yellen said on Thursday, suggesting the central bank was poised to press forward in ratcheting back its stimulus.
The Fed's stimulus programme has pushed money into riskier assets such as commodities and stoked inflation fears.
The physical market was equally quiet in Singapore, a centre for bullion trading in Southeast Asia.
"The $1,300 to $1,350 trading range is small yet tough. There's a lack of direction, which could push gold prices either way, downward or upward," said a physical dealer in Singapore.
In other markets, Asian stocks managed to shrug off early losses on Friday and push higher, inspired by gains on Wall Street after Yellen's comments underscored her confidence in the U.S. economy.
An unexpected rise in U.S. durable goods orders, excluding transportation, also helped distract investors from an increasingly unstable situation in Ukraine.
Ukraine's interior minister said on Friday Russian forces had taken control of two airports in the Crimea region and condemned them an armed invasion and occupation.
Precious metals prices 0714 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1330.86 -0.20 -0.02 10.45
Spot Silver 21.26 0.02 +0.09 9.53
Spot Platinum 1444.99 -2.08 -0.14 5.67
Spot Palladium 741.22 2.82 +0.38 3.96
COMEX GOLD APR4 1331.40 -0.40 -0.03 10.78 16557
COMEX SILVER MAR4 21.25 -0.06 +0.00 9.71 205
Most Popular Slideshows
- Jennifer Lawrence & Nicholas Hoult Allegedly Split: Mad Max Actor Cheats with Kristen Stewart & Riley Keough - Reports
- Taylor Swift Named Forbes' Second Highest Paid Country Musician [PHOTOS]
- Forever Lost: Indescribable Anguish for Malaysia Airlines MH17 Families, Remains of Some Victims May Never Be Found (PHOTOS)
- Lunch with the Gods: Pope Francis Eats with Vatican Workers in Cafeteria
Join the Conversation
- Global Markets Overview – July 15, 2014
- Honduran Gold Mine Caves in; 8 Rescued, 3 Remain Trapped (PHOTOS)
- Chinese Govt Tightens Control on Gold to Curb Imports, Could Drop 400T from 2013 – Report
- ANZ Seeks Role in Pilot Global Gold Trading Platform in Shanghai
- US California Couple Sells 1,400 Rare Gold Coins Found in Backyard, Now Millionaires
- Apple iPhone 6 on Two Confirmed Release Dates, New Parts Leaked Suggesting Bigger iPhone to Come
- Google Nexus 6, 8 with Android L on Release Date Promises Killer Mobile Device Experience
- iPhone 6 Release Date Relevance to iOS Newbies: Specs Meaning, Price Considerations
- HTC One M8 Android 4.4.3 KitKat Update Roll Out, Introducing the HTC One Remix
- Killer Whales Gobble Japanese Whaling Crew
- The Pirate Bay Releases ‘The Mobile Bay’: Mobile Torrent Download Made Easier but Remains Illegal
- 5 Marketing Nuggets We Can All Learn From Lady Gaga