ANL 10.96 Decreased By ▼ -0.16 (-1.44%)
ASC 10.05 Increased By ▲ 0.07 (0.7%)
ASL 12.05 Increased By ▲ 0.20 (1.69%)
AVN 71.10 Decreased By ▼ -0.14 (-0.2%)
BOP 6.00 Increased By ▲ 0.05 (0.84%)
CNERGY 5.27 No Change ▼ 0.00 (0%)
FFL 7.15 Increased By ▲ 0.45 (6.72%)
FNEL 6.15 Increased By ▲ 0.05 (0.82%)
GGGL 11.75 Decreased By ▼ -0.11 (-0.93%)
GGL 15.85 Decreased By ▼ -0.07 (-0.44%)
GTECH 9.30 Decreased By ▼ -0.05 (-0.53%)
HUMNL 6.61 Increased By ▲ 0.05 (0.76%)
KEL 2.55 Decreased By ▼ -0.03 (-1.16%)
KOSM 3.06 No Change ▼ 0.00 (0%)
MLCF 28.60 Decreased By ▼ -0.10 (-0.35%)
PACE 2.98 Decreased By ▼ -0.01 (-0.33%)
PIBTL 6.04 Decreased By ▼ -0.05 (-0.82%)
PRL 15.66 Increased By ▲ 0.61 (4.05%)
PTC 7.30 Increased By ▲ 0.13 (1.81%)
SILK 1.31 Increased By ▲ 0.07 (5.65%)
SNGP 26.50 Increased By ▲ 0.35 (1.34%)
TELE 10.82 Decreased By ▼ -0.13 (-1.19%)
TPL 9.03 Decreased By ▼ -0.02 (-0.22%)
TPLP 15.85 Decreased By ▼ -0.07 (-0.44%)
TREET 29.90 No Change ▼ 0.00 (0%)
TRG 75.70 Decreased By ▼ -1.30 (-1.69%)
UNITY 22.42 Decreased By ▼ -0.03 (-0.13%)
WAVES 13.50 Increased By ▲ 0.55 (4.25%)
WTL 1.62 Increased By ▲ 0.07 (4.52%)
YOUW 5.02 Decreased By ▼ -0.02 (-0.4%)
BR100 4,281 Increased By 8.1 (0.19%)
BR30 14,910 Increased By 12.9 (0.09%)
KSE100 43,101 Increased By 117.3 (0.27%)
KSE30 16,367 Increased By 17 (0.1%)

gold-coinsSINGAPORE: Gold rebounded on Tuesday after posting its biggest one-day loss in a month in the previous session on growing worries about another global economic downturn, but a weaker US dollar and bargain hunting by jewellers offered support.

While industrial metals priced in expectations of a cooling Chinese economy, dealers see no change in China's appetite for bullion. Investors were awaiting a trail of US data later in the day which could set the tone for commodities.

Gold added $6.26 to $1,520.99 an ounce, snapping a two-day drop. Gold, which hit a record around $1,575 in early May, has been buoyed by uncertainties about the outlook for the US economy and worries about euro zone debt.

"I would say gold is still bullish. The main factors are still going back to the monetary policy of the US and the longer-term weakness of the dollar. That could boost gold prices and help it head towards a new record later this year," said a dealer in Singapore.

"The demand for gold in China is going to come pretty robust this year. Despite the slowing economic growth, I think the Chinese will continue to consume quite a bit of gold," he said.

China's inflation accelerated in May to a 34-month high of 5.5 percent, supporting the case for a tightening in monetary policy as soon as this month even as there are signs that economic growth is slowing down.

But Chinese demand for gold bars and coins as private investments could push bullion imports above 400 tonnes in 2011, triggered by concerns about inflation and poor returns in stocks and the property sector.

The United States will release key data on Tuesday, including retail and auto sales, and producer prices, which the market will scour for clues to the magnitude and duration of the slowdown in the world's largest economy.

US economic growth could remain soft for some time but monetary policy may not be able to address the problem, Richmond Federal Reserve Bank President Jeffrey Lacker said.

Gold's recent fall spurred activity in the physical sector.

"We're seeing a little bit of physical buying. It's from jewellery makers," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

"I think we can say gold will try the lower end first, and then maybe $1,480 should be a good support. Starting in August or September, there may be room to go up again."

Swiss franc held near a record high against the euro, benefiting from lingering European debt crisis and being viewed as one of the few major currencies not suffering from debt troubles or the currency debasement of quantitative easing.

On Monday, Standard & Poor's slashed Greece's rating to CCC, making the highly-indebted country its lowest-rated in the world. S&P said European policymakers look increasingly likely to impose a restructuring of Greece's debt.

"Now that the euro zone has its problems, the US has its budget deficit, I think Swiss franc is one of the safe havens that investors would look towards. But I would not see Swiss franc as competing with gold per se," said the dealer in Singapore.

"It would be competing with other currencies."

The dollar index, which tracks its performance against a basket of major currencies, was down a smidgen at 74.488, off a two-week high of 74.960 struck the previous day.

Silver, which usually tracks gold, rose 40 cents to $35.09 an ounce, below a record at $49.51 an ounce hit in April.

Holdings of the largest silver-backed exchange-traded-fund (ETF), New York's iShares Silver Trust, fell 2.1 percent from Friday to Monday, while the largest gold-backed ETF, New York's SPDR Gold Trust saw its holdings dip 0.08 percent during the same period.

In the energy market, oil rebounded after China said industrial production grew at a faster-than-expected pace in May, easing concerns over a global economic slowdown and soothing worries that Europe's debt crisis would dent energy demand.

Copyright Reuters, 2011

Comments

Comments are closed.