|
London: Gold bounced back in Europe on Tuesday on a weaker dollar after falling more than one per cent on possible gold sales by the International Monetary Fund.
Silver hit a 27-year high as investors considered the metal relatively cheap against other precious metals, analysts said.
The United States said on Monday it supported the sale of a limited portion of the IMF's gold stocks and was confident Congress would support the move. The US Treasury had earlier resisted seeking Congressional approval.
"The market is capped because of this IMF sales news. It would be healthy for the market if it dropped back to low $900s. Then it has a better chance to make an assault on $1,000," said Peter Hillyard, head of metals sales at ANZ Investment Bank.
"The dollar would have to get a lot weaker for the market to ignore that and just push through," he said, but added that any price dip or dollar weakness might attract some buying.
Spot gold fell as low as $926.40 an ounce before rising to a high of $943.80. It was $941.40/$942.30 at 1612 GMT, against $937.80/$938.60 in New York on Monday and off last week's record high of $953.60.
The IMF is the world's third-largest gold holder, with 3,217 tonnes of reserves.
Any sale of IMF gold might be done in accordance with a European Central Bank gold accord, which limits total gold sales to 500 tonnes a year, analysts said.
"It is a material development and suggests that it could actually get through. That's a genuine change because the market was assuming otherwise," said Stephen Briggs, economist at SG Corporate and Investment Banking.
|
