Europe gold regains sparkle after dollar slides Reuters London
Gold shone on Friday morning in Europe as the dollar slipped against other currencies and producer selling seen earlier this week eased off, leaving prices with a chance to head up, traders said.
The spot price picked itself up from an overnight low of US$304.25 an ounce after Wall Street stocks took a dive on the back of gloomy economic data out of the United States, and the euro regained some of its strength against the dollar.
U.S. stock markets crumpled on Thursday following the release of data on July manufacturing growth and construction spending, both key indicators of the economy's state of health, renewing investor uncertainty over the pace of the recovery. Gold fed off this concern and pared the steep losses of the past ten days, caused by speculators buying into equity market strength.
"It's (gold) doesn't quite have the safe-haven status as people would like it to have but, everyone seems to have a bit more confidence in it," one London trader said.
At 09.50 GMT (04.50 p.m. Jakarta time) spot gold was quoted at $306.75/307.25 a troy ounce, against $304.35/304/85 at the close of business in New York on Thursday.
After a strong sell-off to four-month lows earlier this week, players squared their books ahead of the weekend, based on some firmness shown by the euro after the European Central Bank's decision on Thursday to leave interest rates unchanged.
"I think the stability in the interest rates yesterday and the quite sharp downturn in the Dow in the afternoon session really paid into gold," the trader said.
Gold's slide towards key psychological support at $300.00 this week prompted some activity from producers, but pressure from this quarter evaporated by Friday, traders said.
"We're on the next move up, if we hold here, we should see $308 on the spot (market)," the trader said.
Silver was swept higher by a combination of gold regaining a stronger foothold above $300.00, and by a flurry of borrowing on some of the further-out dates, traders said.
Traders said borrowing on Thursday on the six- to nine-month dates put a floor under the spot price, which had been ailing since being knocked back to a near three-month low of $4.53 an ounce by disgruntled long position holders.
"Silver is a bit shinier this morning. Yesterday the fix at $4.54 was a significantly low figure for silver," the trader said, adding that the borrowing had bestowed some stability on the silver market.
On Friday morning, silver sat at $4.62/4.64, up from $4.57/4.59 at the close in New York, and with no further borrowing evident in the market, silver monitored gold.
"We've seen the last of the borrowing, that's dissipated now so there are no other factors to help silver except the coat tails of gold," the trader said.
The platinum group metals were steady in London on Friday, as spot platinum held at $524.00/528.00, against $521.00/526.00 in New York, while spot palladium was at $317.00/323.00 against $314.00/324.00.