|
London: Gold steadied in late European trade yesterday after rising more than one per cent, as the dollar gained after hitting record lows on weaker-than-expected US payrolls data and oil prices softened.
Platinum and palladium pared losses after falling sharply on expectations that South African power problems might improve in the coming weeks, analysts said.
Gold rose as high as $988 an ounce after the data but fell to $976.00/$976.80 at 1523 GMT, against $976.20/$976.95 late in New York on Thursday, when it hit a record high of $991.90.
"Compared with what it has done before, gold has slightly underperformed in the last week. My guess is that we are going to see a few more days of sharp swings," said Stephen Briggs, economist at SG Corporate and Investment Banking.
"There is a huge uncertainty in the market after these massive gains we have seen this year. People are getting a bit nervous of the logic of such high prices in an environment of the US remorselessly heading into a recession."
Gold has gained nearly 20 per cent in 2008 as funds, speculators and investors buy the precious metal on expectations of further interest rate cuts in the US and record-high oil.
The euro turned lower versus the dollar after hitting record highs, as investors booked profits on gains made following a drop in US non-farm payrolls for a second straight month.
Oil prices fell, but remained within sight of record highs from the previous session.
"I think we are in for a period of correction for a while now. Gold will be in consolidation mode ahead of the Federal Reserve meeting on March 18," said Simon Weeks, managing director, precious metals, at Bank of Nova Scotia.
But investor interest in exchange-traded funds (ETFs) remained strong, and some analysts said market sentiment was bullish and gold was likely to gain.
Good news
Platinum pared losses after falling nearly five per cent to a two-week low on news that mines in South Africa, the world's top platinum producer, would get more electricity supply.
The South African government confirmed that it would let mines increase power consumption to 95 per cent from 90 per cent.
Platinum fell as low as $2,065 an ounce and was last at $2,095/$2,105, against $2,170/$2,180. It hit a record high of $2,290 this week on supply concerns.
Silver edged higher to $20.21/$20.26 an ounce from $20.15/$20.18 in New York, having reached a 27-year peak of $21.20 on Thursday. Palladium fell to a two-week low of $495/$504 an ounce from $513/516 an ounce.
|
