2010-11-23 04:49:56
Gold futures on the COMEX Division of the New York Mercantile Exchange inched up on Monday, paring earlier losses, as concerns over the further spread of the eurozone debt crisis spurred traders to return to the precious metal as a safe-haven. But the greenback's recovery has kept a lid on gold. Silver also edged higher, but platinum retreated.
The most active gold contract for December delivery moved up 5. 5 U.S. dollars, or 0.4 percent, to 1,357.8 dollars per ounce.
Traders attributed the early strength in gold to the weaker dollar after Ireland formally asked for aid from its European partners late Sunday. But as the rally in the euro faded away, gold started to wobble, giving back earlier gains.
"I think more than anything right now, gold is obviously reacting to dollar/euro spread. Earlier in the session, we had weaker dollar, but as dollar came back strong, gold lost steam, making lows," Mike Daly, gold specialist with PFGBEST in Chicago, told Xinhua.
Daly mentioned that investors, who have been anticipating the U. S. Federal Reserve to continue to defend the policy of quantitative easing in its FOMC minutes on Tuesday, chose to remain sidelines on Monday. Meanwhile, the fact that China's Central Bank didn't raise interest rate over the weekend as many investors had expected was also considered quite supportive to the bullion.
Daly added that the fact Ireland is going to accept financial aid from the European Union and the IMF to stem its banking and budget crisis also spurred many savvier European investors to use their euros to buy gold and silver to protect their wealth, as the fragility and uncertainty of the euro region remains prevalent.
"People are once again using gold as a safe haven investment, just simply because of a lack of confidence in the European Union' s financial regulators as well as financial regulators here," Daly noted.
Silver futures for December delivery rose 28.2 cents, or 1 percent, to 27.461 dollars per ounce. January platinum trimmed 15. 6 dollars, or 0.9 percent, to 1,655.5 dollars per ounce.
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