Precious metal stays within narrow range
San Francisco, CA -- (SBWIRE) -- 10/08/2012 -- Gold held its value today, keeping minor gains from previous two sessions as investors awaited word from central banks on plans to bolster a flagging economy as most focused on the current United States employment report.
There was little trading interest in China, which was still on a public holiday, while investors watched the European Central Bank and Bank of England for new rates announcements.
Traders are expected to remain cautious as they await the U.S. employment report due Friday. Data released Wednesday indicated a surprise spike in private employment in the U.S.
"There is little interest right now as people focus on the nonfarm payrolls data on Friday," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong. "For now, gold is stuck in a narrow range of $US1,775 and $US 1,780 an ounce."
Spot gold remained unchanged at $US1,778.84 an ounce, while US gold crept up 0.1 % to $US1,781.50.
Reuters market analyst Wang Tao said gold will move up in value quickly if it can break out of the $US1,760-$US1,785 range.
Investor interest in gold stayed up as holdings of gold-backed exchange-traded funds crept up to 74.152 million ounces by Oct. 2, slightly below a record high of 74.288 million ounces hit in late September.
In the eighth consecutive session of gains, spot platinum reached a 2-1/2-week high of $US1,686.49 an ounce. The gains are largely due to labour disputes in South Africa resulting in a halt to production in a top producer’s mines.
"We think that all these markets (including gold) will likely head south if the sell-off we had in energy morphs into a broader retrenchment over the days ahead," said Ed Meir, an analyst at INTL FCStone.
Long considered a safe haven asset, gold could drop in value if sharp declines in other markets spill over, prompting investors to sell their gold to make for losses elsewhere. That scenario occurred at the beginning of the global financial crisis in the latter half of 2008.
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