Gold prices were steady yesterday after the euro bounced slightly higher against the US dollar. However, early bargain hunting from Chinese speculators may influence gold prices resulting in sharp movements due to low volumes.
Euro rose against the US dollar though weaker oil prices could prompt new selling. Platinum and palladium slipped in early trade but held near recent highs. Spot gold was at $1,122.00 an ounce yesterday, barely changed from New York's notional close on Tuesday, when it dropped to $1,108.55, its weakest since February 26, because of a resurgent dollar and falling oil prices.
"If you look at it on a week-on-week basis, the SPDR Gold Trust holdings are still up. It means that investment demand is still there and it is supported by retail," said Wong Eng Soon, an investment analyst at Phillip Futures in Singapore.
Debt concerns in eurozone countries also boosted gold's appeal as a hedge against currency fluctuations, said Wong, adding that the metal could find support at a February low of around $1,080 an ounce. Gold was around two per cent below a six-and-a-half week high near $1,150 hit in early March.
SPDR Gold Trust said its holdings stood at 1,116.120 tonne as at March 9.