(Updates prices)
By A. Ananthalakshmi
SINGAPORE, Dec 23 (Reuters) - Gold inched up on Wednesday,
taking cues from a rebound in oil prices and a softer dollar as
the metal drifted in a tight range in thin pre-holiday trade.
Spot gold XAU= rose 0.3 percent to $1,074.98 an ounce by
0643 GMT. The metal had eased 0.6 percent on Tuesday, snapping a
two-day rally.
Oil prices stabilized after plumbing 11-year lows earlier in
the week. Gold is positively correlated to oil as the metal is
seen as a hedge against oil-led inflation. O/R
Gold has recovered from the losses that followed last week's
move by the Federal Reserve to raise interest rates for the
first time in nearly a decade, largely on short covering.
But the outlook for bullion remains bearish, with the Fed
set to hike rates further next year and energy markets poised
for more declines.
"The Fed would be quite keen to continue monetary policy
tightening, albeit only gradually over 2016, followed by a
faster pace in the following years," Societe Generale (PA:SOGN) said in a
note late on Tuesday, adding that this would strengthen the
dollar and hurt gold.
Low inflationary pressures in the Unites States and
elsewhere, due to depressed energy prices, will also limit
interest in gold, Societe Generale said.
Investor sentiment towards gold remains bearish. Assets of
the top gold exchange-traded fund are near a seven-year low.
Short positions on COMEX are at a record high, according to
recent U.S. government data, though that could also trigger some
near-term short covering.
Several brokerages have predicted that gold will drop below
$1,000 an ounce next year.
Support for gold from physical markets also looks bleak. In
top consumer China, there are fears of a protracted loss of
confidence among buyers, with many predicting that demand could
fall for a third year in 2016.
Trading is expected to remain quiet as liquidity thins ahead
of the Christmas holiday. Japanese markets were closed on
Wednesday.
The dollar was little changed in Asian trading on Wednesday,
following a three-day losing streak, after data overnight
painted a mixed picture of the U.S. economy, offering some
support for gold. USD/
U.S. home resales posted their sharpest drop in five years
in November.
Other data on Tuesday showed the U.S. economy grew at a
fairly healthy clip in the third quarter as strong consumer and
business spending offset efforts by businesses to reduce an
inventory glut.
PRICES AT 0643 GMT
Metal Last Change Pct chg
Spot gold 1074.98 3.02 0.28
Spot silver 14.274 0.019 0.13
Spot platinum 869.85 -0.51 -0.06
Spot palladium 555.75 3.1 0.56
Comex gold 1074.6 0.5 0.05
Comex silver 14.265 -0.049 -0.34
COMEX gold and silver contracts show the
most active months
(Editing by Tom Hogue; Editing by Sunil Nair)
By A. Ananthalakshmi
SINGAPORE, Dec 23 (Reuters) - Gold inched up on Wednesday,
taking cues from a rebound in oil prices and a softer dollar as
the metal drifted in a tight range in thin pre-holiday trade.
Spot gold XAU= rose 0.3 percent to $1,074.98 an ounce by
0643 GMT. The metal had eased 0.6 percent on Tuesday, snapping a
two-day rally.
Oil prices stabilized after plumbing 11-year lows earlier in
the week. Gold is positively correlated to oil as the metal is
seen as a hedge against oil-led inflation. O/R
Gold has recovered from the losses that followed last week's
move by the Federal Reserve to raise interest rates for the
first time in nearly a decade, largely on short covering.
But the outlook for bullion remains bearish, with the Fed
set to hike rates further next year and energy markets poised
for more declines.
"The Fed would be quite keen to continue monetary policy
tightening, albeit only gradually over 2016, followed by a
faster pace in the following years," Societe Generale (PA:SOGN) said in a
note late on Tuesday, adding that this would strengthen the
dollar and hurt gold.
Low inflationary pressures in the Unites States and
elsewhere, due to depressed energy prices, will also limit
interest in gold, Societe Generale said.
Investor sentiment towards gold remains bearish. Assets of
the top gold exchange-traded fund are near a seven-year low.
Short positions on COMEX are at a record high, according to
recent U.S. government data, though that could also trigger some
near-term short covering.
Several brokerages have predicted that gold will drop below
$1,000 an ounce next year.
Support for gold from physical markets also looks bleak. In
top consumer China, there are fears of a protracted loss of
confidence among buyers, with many predicting that demand could
fall for a third year in 2016.
Trading is expected to remain quiet as liquidity thins ahead
of the Christmas holiday. Japanese markets were closed on
Wednesday.
The dollar was little changed in Asian trading on Wednesday,
following a three-day losing streak, after data overnight
painted a mixed picture of the U.S. economy, offering some
support for gold. USD/
U.S. home resales posted their sharpest drop in five years
in November.
Other data on Tuesday showed the U.S. economy grew at a
fairly healthy clip in the third quarter as strong consumer and
business spending offset efforts by businesses to reduce an
inventory glut.
PRICES AT 0643 GMT
Metal Last Change Pct chg
Spot gold 1074.98 3.02 0.28
Spot silver 14.274 0.019 0.13
Spot platinum 869.85 -0.51 -0.06
Spot palladium 555.75 3.1 0.56
Comex gold 1074.6 0.5 0.05
Comex silver 14.265 -0.049 -0.34
COMEX gold and silver contracts show the
most active months
(Editing by Tom Hogue; Editing by Sunil Nair)