December contract hits fresh intraday high above $1,105
By Myra P. Saefong, MarketWatch
TOKYO (MarketWatch) -- Gold futures climbed to new heights in electronic trading Monday in Asia, with the most-active December contract tapping an intraday high of $1,105 an ounce, as the market extended gains from Friday's record New York finish.
Ongoing concern over global economies continued to boost the precious metal's appeal as a safe-haven investment.
Overall, however, "there is a lack of major market-moving news today," said Chintan Karnani, an analyst at Insignia Consultants in New Delhi. And "with every rise, gold is reaching over-bought conditions."
Even so, "highly over-bought conditions are yet to be reached, suggesting room for further gains if the momentum continues," he said. "Intraday, gold needs to break $1,107-$1,112 zone [or] else there will be a correction to $1,091 and $1,080 zone."
Gold for December delivery, the most-active futures contract, climbed to a contract high of $1,105.40 an ounce on Globex. It was at $1,104.30, up $8.60 by the late afternoon in Tokyo. That surpassed the intraday high of $1,101.90 on Friday in New York.
November gold -- the thinly traded, front-month contract -- was up $5.20 at $1,100.30, its peak so far for the electronic trading session. It closed at a front-month record level of $1,095.10 on Friday in New York.
'Very impressive'
Gold is a "very impressive market," said Darin Newsom, Telvent DTN senior analyst. "Following U.S. unemployment data Friday, it is finding plenty of safe-haven buying worldwide on the idea global economies may not be as strong as advertised."
U.S. government figures released Friday showed that the nation's unemployment rate topped 10.2% in October, lifting expectations the Federal Reserve will keep interest rates near zero well into next year, and thus pressuring the dollar. See story on unemployment.
"Gold fundamentals are still bullish," said Newsom, with the "Federal Reserve giving no indication of raising interest rates, keeping pressure on the dollar, and concern over global economics."
And the fact that buyers are coming in at all-time highs "speaks to the strength of the market [as well as to the] depth of the [economic] fear," said Newsom, pointing out India's recent "large-scale" buy of bullion from the International Monetary Fund as an example.
