Gold Hits 11-Week High, Briefly Tops $1,400 - Gulf Business
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Gold Hits 11-Week High, Briefly Tops $1,400

Gold Hits 11-Week High, Briefly Tops $1,400

The precious metal was buoyed by weak U.S. data and political tensions in Syria.


Gold was trading near 11-week highs on Monday after briefly breaking above the $1,400 mark, buoyed by weak U.S. data and inflows into the world’s biggest bullion-backed exchange traded fund.

The precious metal jumped in early Asian trading to $1,406.01 – its highest since June 7 – running on from a rally on Friday and supported by political tensions in Syria, before giving back some gains.

“We are generally coming out of the summer doldrums and people are looking for gold trade ideas,” said one Hong Kong-based precious metals trader.

“We are in the aftermath of a highly distressed slowdown so people still see some value in it, at least as a trade if not a longer term investment.”

Spot gold was little changed at $1,396.43 an ounce by 0635 GMT. The metal, seen as a safe-haven, gained 1.6 per cent on Friday after weak U.S. home sales, which potentially weakened the case for a tapering of economic stimulus.

A top U.S. central banker said on Saturday the Federal Reserve could announce a cautious first step in tapering bond purchases at its meeting next month, provided there were no “really worrisome” signs the economy was faltering.

In South Africa, the National Union of Mineworkers (NUM) gave gold mining companies seven days on Saturday to meet its demand for pay rises of up to 60 per cent or face strike action.

NUM, the main mining union, walked out of deadlocked wage talks with the companies last week, setting the scene for a gold industry shutdown in a country that accounts for six per cent of total gold output.


Hedge funds and money managers boosted bullish bets in gold futures and options to their highest level since early February, buoyed by the uncertain timing of the Fed’s planned unwinding of its bond-buying stimulus, a report by the Commodity Futures Trading Commission showed on Friday.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.72 per cent, or 6.61 tonnes, to 920.13 tonnes on Friday.

The fund has seen positive flows over the last two weeks, as gold prices gained on shifting sentiment and technical buying.

Friday’s inflow was the biggest this year, according to Barclays.


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