Gold holds around two-and-a-half-week high as dollar softens
London (Nov 18) Gold steadied below a two-and-a-half-week high hit earlier on Tuesday as the dollar softened against the euro due partly to better-than-expected German economic data.
Spot gold was up 0.6% at $1,193.60 an ounce by 3.39pm GMT after earlier reaching its highest since October 30 at $1,204.70. US gold futures also jumped to a near three-week high of $1,204.10.
The metal has rebounded around 6% from a four-and-a-half-year low of $1,131.85 hit on November 7.
"Gold is finding more strength after we broke the $1,180 resistance level from the fact that the dollar’s rally has stalled," said ActivTrades senior analyst Carlo Alberto de Casa.
The dollar slipped 0.3% against a basket of major currencies, mostly due to a stronger euro after the ZEW survey showed German economic sentiment rose in November for the first time in almost a year, beating expectations and raising hopes of an improvement in Europe’s biggest economy.
A weaker greenback makes dollar-denominated gold less expensive for holders of other currencies.
Gold had dipped earlier in the session as the dollar was boosted by economic data showing that while US manufacturing output rose only modestly, factory activity rebounded in New York State.
Markets were awaiting minutes of the Federal Reserve’s October meeting, to be released on Wednesday.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.33% to 723.01 tonnes on Monday, the first increase since November 3.
Elsewhere, India’s central bank is in talks with the government to increase curbs on gold imports and an announcement could come as early as Tuesday, a finance ministry source said.
More restrictions could hit demand from India and add pressure on gold prices.
In China, local prices held steady at a premium of $2 to $3 an ounce to London levels, as buying picked up on steadier international prices.
Among other precious metals, platinum rose 0.5% to $1,203.50 an ounce, while palladium rose 0.6% to $772.10 an ounce. Silver was up 0.4% at $16.17 an ounce.