Gold prices up as euro spurs bargain hunting
Gold prices ticked higher yesterday after a firmer euro spurred bargain hunting from investors seeking a safe haven from volatile currencies, while palladium held near its strongest level in nearly two years.
Gold was at $1,135.90, up $2.10 from New York's notional close on Friday, when bullion in euro terms jumped to a record of €838.26 on buying driven by a sovereign debt crisis in Greece. Gold price in euro was within sight of Friday's record. A steady increase in exchange-traded fund holdings showed a growing interest in bullion but the physical market was muted in Asia, with dealers reporting persistent sales of scrap from Indonesia.
But a slow physical market could also curb gains, with dealers reporting a pickup in sales from Japanese speculators that forced trading houses to offer gold bars at a discount for the first time in two months.
"We started on a weaker note, but the market then recovered because of a firmer euro. It's sporadic buying, although I don't think it's coming from the physical market," said a dealer in Hong Kong, referring to gold jewellers. The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,116.120 tonne as of March 5, up 0.609 tonne from the previous business day.
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