The shiny metal inclined for the fourth day, as the U.S. dollar slipped, reviving demand on gold as an alternative to the vulnerable dollar.
Yesterday, gold added $2.70 or 0.29% to close at $947.90 an ounce. Gold Prices were set in London on Thursday at $943.00 an ounce, declining from $943.50 an ounce during the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, remained unchanged at 1,061.83 metric tons on August 27.
Gold gained yesterday, after crude oil rebounded above $72 a barrel on a better-than expected GDP report in the U.S., which boosted stocks and enhanced demand on risky assets. However, the decline in Chinese shares reduced gains. The rise in oil caused gold to surge, as a hedge against oil-led inflation. Oil is now traded at $72.67, recording a high of $73.00 and a low of $72.50.
Stock markets bounced yesterday, in the U.S., after the better-than estimated profits announced by large U.S. companies; such as Dell Inc. Today, Asian stocks followed the U.S. suit, leading the MSCI India Pacific Index to reach its second weekly gain; while Nikkei Index jumped 0.7% at the early trading in Japan.
On the other hand, the green currency changed a little today, after yesterday's sharp drop. The dollar index, a gauge of the dollar's value versus six major currencies, is currently at 78.11, compared with the previous day's closing at 78.13.
The U.S. dollar is expected to further weaken in the upcoming period, as long as it is bought as a refuge currency; due to the global recovery and the ongoing improvement witnessed by major economies, which buttress demand on higher-yielding assets. Today, the green currency may face more downside pressure, after the release of the European confidence report, which is expected to peak to its highest level in 10 months.
Gold also received support from physical buying of bullions on expected demand, as festivals approach in India; which is considered to be the largest gold importer. Many traders are waiting for the gold import data for the month of August to take sell or buy positions.
Spot gold is now traded at $950.17 an ounce, recording a high of $951.47 and a low of $947.70. Prices are moving between support at $946.15 and resistance at $955.95.
Among other precious metals; platinum lost some of its gains on strikes in the second largest mine in South Africa. Platinum edged up today to $1241.50 from $1237.00 at Thursday's closing. Palladium surged to $286.00 from $285.00; and silver soared to 14.31 from $14.28.