Gold price hovers near 2010 low

New York (Nov 18)  Gold eked out small gains on Wednesday as another bomb scare in Europe and gunfire in Paris fuelled tentative safe-haven bids, but a firm dollar kept a lid on prices that hit their lowest in nearly six years earlier in the session.

Silver tracked bullion, returning to positive territory after dropping to a 2-1/2-month low, while platinum languished at a seven-year low.

Spot gold was up 0.07 percent at $1,071.4 an ounce at 0752 GMT, after falling to $1,064.95 earlier, the lowest since February 2010.

 US gold futures for December delivery were up 0.11 per cent at $1,069.7. Bullion prices have fallen for 14 out of 16 sessions under pressure from expectations that the US Federal Reserve is set to raise interest rates next month.

 Data on Tuesday showing US consumer prices increased in October further fuelled those expectations.

 But bullion managed to regain some lost ground late in Asia trading as the dollar eased slightly to 99.48 against a basket of currencies. This, however, was not too far off its 7-month highs of 99.76 hit earlier in the session.

“We saw a pop in the last few days, but the knee jerk reaction didn’t really last. The overriding factor has been the rising dollar and the expectation of Fed hiking rates in December,” said Victor Thianpiriya, analyst at ANZ. However, heightened security concerns in Europe after Friday night’s attacks in Paris in which 129 people were killed continue to underpin gold’s safe-have appeal.

 German authorities called off a soccer game which Chancellor Angela Merkel was due to attend, citing threats of bombing, while two Air France flights to Paris from the United States have been diverted.

 Gunfire also erupted in a north Paris suburb early on Wednesday as special police forces launched an operation to catch one of the suspects believed to be behind last week’s gun and bomb attacks.

Indian gold fades too

 Following the global trend, gold price in India declined by two per cent to close at Rs 25,180 per 10gms, in Zaveri Bazaar, Mumbai, on Wednesday. The metal is heading towards the recent low of Rs 24,850 per 10 gm, seen in June this year. Similarly, silver also fell by around one per cent, to close at Rs 34850 a kg. Normally, bullion sales take a break after being overbought during Diwali week. But, sales have remained low this year, as traders await further fall in bullion prices, following likely interest rate hike by the US Fed in December, which may see a sharp pullback from risky assets including gold.

Source: Business-Standard