Gold firms in Europe after Bali bombings
Gold firms in Europe after Bali bombings
Reuters
Gold ticked up in European trade on Monday as investors
refused to short the safe-haven metal in the wake of stock market
jitters prompted by the deadly bombings in the Indonesian tourist
island of Bali.
Bullion was set or "fixed" in the London morning session at
US$318.00 an ounce, up from the previous fix of $316.85 an ounce.
"Events over the weekend again demonstrate why traders are
unwilling to be short gold," said John Reade, metals analyst at
UBS Warburg.
In Indonesia, anxious families and friends hunted for loved
ones on the Bali resort island after bomb blasts killed at least
183 revellers, mostly young Westerners, in a popular nightclub
strip.
The worst act of terror since the September 11 attacks on the
United States heightened fears the al Qaeda network, scattered
from Afghanistan, was regrouping and planning more assaults.
Safe-haven gold has rallied this year on geo-political jitters
ranging from fears of a repeat attack on the U.S. mainland
similar to the events of Sept. 11, 2001, U.S. threats of military
action against Iraq to violence in the Middle East and Kashmir
this year.
Slumping stock markets, a weak dollar and a move by leading
gold miners to reduce their forward sales of the precious metal
have also been instrumental in attracting investor interest.
Spot gold hit $318.50 an ounce in European trading, up from
$316.70/317.20 an ounce at the New York close on Friday and 14
percent higher since the start of this year, making it one of
this year's best performing assets. By 10.06 GMT (05.06 p.m.
Jakarta time) it had edged back to $317.50/318.00.
"The near term trading range would appear to be $316.00 to
$321.00, with technical resistance located on the upside at
$319.70 (9 day MA) and $320.85 (18 day MA)," said Standard Bank
London.
A strong upturn in gold lease rates, led by covering by a
major U.S. investment bank which came into the market to cover
its holding position after a ratings downgrade led to
withdrawals, had also supported the metal briefly, analysts said.
Silver perked up on the back of gold and in reaction to heavy
selling last week which took the short position of the metal on
the Nymex to its highest level since November last year, analysts
said.
Spot silver was quoted at $4.33/35, up from the New York
close of $4.31/33 an ounce.
Platinum was quoted at $587.00/592.00, down from
$590.00/595.00 at the New York close.
"Platinum remains on the firm side with the battle between the
TOCOM shorts and the NYMEX longs looking set to continue.
Resistance is seen around $595-$600 which is keeping the market
capped for the moment, but liquidity still remains an issue and
could well spark another short covering if the rates tighten
further," said James Moore, metals analyst at TheBullionDesk.com.
Palladium was quoted at $316.00/322.00, flat from
$316.00/326.00 an ounce at the New York close.