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Tue, May 13, 2008 - Page 10 News List

Gold trades near two-week high on index gains

A BEARISH TILTBullion has climbed 6.1 percent and the greenback has shed 5.3 percent against the euro this year, while the dollar index rose

BLOOMBERG

Gold traded near a two-week high in Asia, erasing earlier gains after the dollar advanced and eroded the appeal of the precious metal as an alternative asset.

Bullion has climbed 6.1 percent while the dollar has shed 5.3 percent against the euro this year. The dollar index, a measure of the currency’s value against six major counterparts, gained for the first time in three days yesterday.

“For gold and silver we are actually neutral with a bearish tilt,” Rowan Menzies, head of research at Commodity Warrants Australia Ltd in Sydney, said in an interview with Bloomberg Television.

“We are particularly focused on what the US dollar is doing at the moment and I think it’s showing some signs of strength,” he said.

Bullion for immediate delivery was little changed at US$884.59 an ounce (28.3g) in Singapore. Silver was also little changed at US$16.795 an ounce.

INDEX

The dollar index gained 0.4 percent to 73.343 at 1:43pm in Singapore. The euro fell 0.5 percent to US$1.5408 against the dollar, while the yen also declined to ¥103.32 a dollar from ¥102.87 on Friday.

Gold rallied for the first time in four weeks last week as crude oil advanced to records. Still, “short-term investors seemed to be bullish on crude oil but they are not so enthusiastic about gold,” Bruce Ikemizu, trader at Standard Bank Plc, said by telephone from Tokyo yesterday.

“So oil’s record prices may not revive buying interest in gold,” he said. “The market was too long on gold and it’s natural to see people get out of long positions.”

INVESTORS

Investors have been trimming their bets on price rises in gold futures for a third week. Hedge-fund managers and other large speculators decreased their net-long positions in New York gold futures in the week ended on May 6, US Commodity Futures Trading Commission data showed.

Speculative long positions, or bets prices will rise, outnumbered short positions by 155,967 contracts on the Comex division of the New York Mercantile Exchange. Net-long positions fell by 4,681 contracts, or 3 percent, from a week earlier.

Gold for June delivery was down 0.3 percent at US$883.50 an ounce in after-hours electronic trading on Comex at 1:50pm Singapore time.

Gold for April delivery was little changed at ¥2,958 a gram on the Tokyo Commodity Exchange at 2:52pm, while gold for December delivery traded in Shanghai gained 0.1 percent to 197.24 yuan a gram.

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