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Gold steady on euro zone woes; technicals presssure - ASHARQ AL-AWSAT English Archive
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SINGAPORE, (Reuters) – Spot gold held steady on Friday below record highs hit in the previous session, as worries about euro zone’s debt crisis and Middle East turmoil supported sentiment, but its price may be facing headwind at key technical levels.

Standard & Poor’s downgraded Portugal’s credit ratings, after its government failed to get austerity measures past parliament, stoking fears that the country might need a bailout after all.

Intensified euro zone debt concerns helped push spot gold to a record peak of $1,447.40 an ounce on Thursday, and silver to a 31-year high of $38.13.

“The market will remain choppy, as the trend is not very clear even with support from the Libyan crisis and other factors,” said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

Spot gold inched up 0.3 percent to $1,433.65 an ounce by 0333 GMT, on course for a weekly rise of nearly 1 percent.

U.S. gold was little changed at $1,434.

Technical analysis suggested that gold has entered a consolidation phase, likely within a range of $1,422 and $1,438, said Reuters market analyst Wang Tao.

“Speculation on further monetary policy easing in the U.S., central banks’ purchase, and recovering demand from the jewellery sector will help buoy sentiment in the gold market,” said a Hong Kong-based dealer, but added that speculators are wary of holding long positions at high price levels.

The physical market remained calm despite the price spike, with Hong Kong’s gold premium little changed around $1.50 an ounce over London spot prices, dealers said.

SILVER’S APPEAL

Holdings in the world’s largest physically backed exchange-traded fund, iShares Silver Trust, arched to a record high of 11,139.52 tonnes by March 24, up 1.6 percent from the level on March 18.

Spot silver rose by 0.7 percent to $37.37 an ounce, headed for a 6.5 percent weekly rise, leading the precious metals complex.

Silver, dubbed as the poor man’s gold, has become increasingly popular among investors who seek to maximise their exposure to bullish price outlook.

Gold-silver ratio, used to measure how many ounces of silver is needed to buy an ounce of gold, dipped to 38.35, its lowest since October 1983.

Spot silver gained 21 percent so far this year, compared to just 1 percent rise in gold.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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