IBT: Gold steadies after rising nearly 2 percent; dollar
Gold steadied on Monday after rising nearly 2 percent in the previous session to above $1,400 an ounce, with a struggling U.S. dollar that pushed silver to its highest since early 1980 likely to spur more buying from investors.
Any signs of a weaker U.S. economy or heightened tensions between the two Koreas could also bolster gold, while worries about euro zone sovereign debt remain on investor minds.
South Korea started live-fire naval exercise on Monday, despite Pyongyang's warnings against conducting the drills in disputed waters off the west coast of the peninsula.
"We are still worried about situation in Europe. There's still money flowing into the physical market," said Dick Poon, manager at Heraeus in Hong Kong, referring to purchases by investors.
Spot gold rose to $2.15 an ounce to $1,416.50 by 0709 GMT, having hit a low around $1,408. Gold had risen as high as $1,415.36 on Friday as the dollar tumbled following disappointing jobs data in November.
Bullion hit a record high around $1,424 an ounce in November.
Cash gold may rise further toward $1,435 an ounce as a new labeling of its wave pattern suggests a potential extension of the current rally, according to Reuters technical analyst Wang Tao.
U.S. gold futures for February rose $10.9 an ounce to at $1,417.1 an ounce.
The dollar on Monday recouped some ground lost from a renewed focus on U.S. quantitative easing, and was helped by short covering, while the euro fell back toward channel support ahead of a meeting of European finance ministers.
Gold had seen a bit of buying related to the tension in the Korean peninsula after North Korea's artillery attack on a southern island last month, although investors were paying more attention to the debt crisis in Europe and talk about another round of U.S. quantitative easing.
Fed chairman Ben Bernanke was reported in an interview with CBS television as not ruling out further bond purchases beyond the $600 billion already announced.
"I think we are watching the tensions in Korea, and whether China will hold talks on this issue. You can say the U.S. economy will recover only very slowly, so if there's no change, there will be a second round of quantitative easing," said a dealer in Hong Kong.
"I think sentiment in gold is still bullish. We are waiting to break a new high. We are seeing more buying from investors than from jewelers."
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings slipped to 1,298.030 tons by December 3 from 1,298.447 on Dec 2. The holdings hit a record at 1,320.436 tons on June 29.
Silver firmed to its highest since March 1980, catching up with gold.
Platinum rose to its highest since November 10, while palladium held near its highest level since early 2001 despite reports that China will not extend tax incentives for small cars next year.
