Gold climbs back towards $1,200/oz as price drop tempts buyers
London (Nov 20) Gold rose on Thursday as the previous day's 1 percent drop lured price-sensitive buyers, though gains were limited by dollar strength after Federal Reserve minutes suggested the United States is still likely to raise interest rates next year.
The metal fell sharply on Wednesday after a poll showed weaker support among Swiss voters for a referendum proposal that would force the central bank to boost its gold reserves.
Appetite for physical gold sparked a reversal in that move, dealers said, with demand from buyers in Asia lifting gold off its overnight low at $1,176.56 an ounce.
Spot gold was up 1 percent at $1,195.34 an ounce at 1049 GMT, while U.S. gold futures for December delivery were up $1.20 an ounce at $1,195.10.
"After a big price drop in a small time, you get a return in Chinese demand, and that's what we've seen," Natixis analyst Bernard Dahdah said. "But I wouldn't expect gold to continue rising back to $1,250, mainly because of the stronger dollar."
Gold exports to China from Switzerland, a major trading and refining centre for precious metals, more than tripled to 42.5 tonnes last month, Swiss customs data showed.
The dollar extended gains against the euro after purchasing managers' surveys from the euro zone showed business growth was weaker than forecasters expected this month.
Currency traders are awaiting U.S. economic data, including the consumer price index and jobless claims, due later in the day, for any impact on the dollar. A stronger dollar tends to weigh on gold, which is priced in the U.S. unit.
Selling by gold funds resumed after a brief pause this week. The world's largest gold-backed exchange-traded fund, SPDR Gold Shares, said its holdings fell 0.3 percent to 720.91 tonnes on Wednesday -- close to a six-year low.
Among other precious metals, platinum briefly slipped into a discount to gold for the first time since mid-October before recovering to trade at a premium of about $10 an ounce.
Spot platinum was up 2 percent at $1,207 an ounce, while spot palladium was up 1 percent at $767.72 an ounce.
Silver was up 1.2 percent at $16.29 an ounce.
Source: brecorder
