Gold steady above $890 per ounce

Spot gold edged up on Tuesday, supported by recent weakness in the dollar and bullish technical views, but the yellow metal looked capped at $900 per ounce a day after failing to break above that level. Investors were watching stock market moves to gauge risk appetite as markets reopened after the Easter holiday. Gold prices appeared unmoved after North Korea said it would no longer be bound by an international nuclear disarmament deal, traders said. Spot gold was trading at $897.00 per ounce, up 0.55 per cent from New York's notional close of $892.05 on Monday, when it rose as high as $899.35. Bullion last closed above $900 on April 2 before hitting a 2-½ month low of $864.30. "It's not yet clear how Europe will see current prices, which are about $20 higher than where they were before the Easter holiday," said Yuichi Ikemizu, Tokyo branch manager at Standard Bank Plc, adding that he saw gold staying between $885 and $900 for now. Louis Lok, a senior dealer at Bank of China in Hong Kong, said bullion could test $900 again later in the day as the dollar has come under pressure from a growing number of bright spots in the global economy. Another support factor was gold's recent rise above its 100-day moving average, which now stands at $884, and is a sign that market sentiment is improving after a two-week sell-off, he said. Gold's downside has been supported by seasonal demand from India, the world's largest consumer, which is preparing for the Akshaya Tritiya festival on April 27, when Hindus, particularly in the south, buy gold to invoke prosperity. But further gains in stock markets could put a lid on gold, traders said. "If earnings at US banks are good enough to contain worries about the sector, that would lift stocks higher. That's negative for gold," said a manager at a Japanese trading company. Markets are waiting to see how US banks fared in the first quarter, looking for signs the financial sector may be starting to stabilise, while news that Goldman Sachs posted a higher-than-expected $1.7 bln profit lifted sentiment. The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust said its holdings by April 13 were unchanged at a record 1,127.68 tonnes, a level first reached on April 9. Spot platinum stood at $1,233 per ounce, down 0.2 per cent from New York notional close of $1,236.50. On Monday it hit a session high of $1,244, the highest since September 23, as buying picked up, reflecting growing jewellery demand in China and amid speculation that investment demand for the white metal may catch up with that of gold, traders said.