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Journalism of Courage
Gold fell 0.4 percent on Monday,on course for a third consecutive session of loss,as a revived risk appetite drives investors to stocks and away from safe havens.
Buying interest in Asia,especially from China,helped offset some of the selling pressure,dragging spot gold back from a 1-percent loss earlier in the day,traders and analysts said.
Investors have switched from the buy-gold-sell-stocks mode to sell-gold-buy-stocks mode as Asian stock markets have performed better than gold,said a Hong Kong-based dealer.
Asian stocks bounced on Monday following Wall Street gains,with Japan’s Nikkei up 1.4 percent.
Spot gold traded down 0.4 percent to $1,738.46 an ounce by 0645 GMT. U.S. gold lost 0.1 percent to $1,740.40.
The sharp decline in global spot prices opened up an arbitrage window for Chinese market participants. The gold forward contract on the Shanghai Gold Exchange stood at 358.70 yuan a gram,or $1,745.79 an ounce.
We saw strong buying interest from Shanghai after the markets opened there,said Peter Fung,head of dealing at Wing Fung Precious Metals in Hong Kong.
The most-active Shanghai gold futures was last quoted at 360.24 yuan a gram,equivalent to $1,753.28 an ounce.
The fall in gold-backed exchange-traded funds added to gold bulls’ concern. Holdings of the SPDR Gold Trust,the world’s largest gold ETF,dropped 1 percent on the day to 1,260.173 tonnes by Aug. 12,the lowest in a week and half.
In addition,data showed that speculators scaled back their bullish bets in U.S. gold futures and options last week,even as gold hit a record high of $1,813.79 on Aug. 11.
But technical analysis suggested that gold could rebound to $1,768 an ounce in the next 24 hours,said Reuters market analyst Wang Tao.
Gold rallied to a record high of $1,813.79 last Thursday,as investors fled riskier assets to seek safe haven in bullion in the aftermath of the U.S. credit downgrade.
The gold market is waiting for U.S. data on Monday that will show changes in investment holdings by hedge funds and institutional investors during the second quarter.
Eyes will be on John Paulson,the biggest holder of the SPDR Gold Trust.
Spot platinum lost 0.2 percent to $1,789.99 an ounce,after rising for four straight sessions.
The gold-platinum spread has gone from a premium in the middle of last week to a discount of about $50,said a Singapore-based trader.
If and when we get improving sentiment,we should see that discount expanding to maybe $150.
Ebbing panic in the markets is likely to help other industrial metals,such as silver and palladium,he added.
