Gold Edges Down as Stocks Rally, ETF at Record
Source: Reuters (3/23/09)
". . .SPDR Gold Trust, said its holdings hit a record 1,114.60 tons as of March 20. . ."
But a consistent rise in holdings of gold-backed securities meant a limited downside for gold below $950 an ounce for now, traders said. The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings hit a record 1,114.60 tons as of March 20, up 11.31 tonnes or 1% from the previous day.
Buying of gold by ETFs, which back the securities they issue with physical stocks of bullion, has picked up pace since the Federal Reserve announced plans to buy $300-billion in longer-dated Treasuries on Wednesday, causing a fall in the dollar and spurring inflation concerns.
SPDR alone has added 45.55 tonnes of gold to its reserves since Wednesday.
But the Fed move, as well as expectations that a U.S. plan to rid banks of $1-trillion of toxic assets was closer to being implemented, fueled optimism about the global economy, helping send Asian stocks to a two-month high.
Spot gold was trading at $950.50 ounce at 0301 GMT, versus New York's notional close of $950.90 on Friday, when it rose as high as $966.70, its highest level since February 25.
"A strong performance in stock markets usually soaks up money, and gold is down today because of that," said Yuki Sonoda, an adviser at Daiichi Commodities Co.
Last week gold rose 2.6%, the biggest weekly gain since the week to February 20, during which it briefly topped $1,000.
U.S. gold futures for April delivery fell $4.7 an ounce to $951.50, adding to a $2.60 fall in the previous session.
Among other precious metals, spot platinum fell to $1,097.50 an ounce in a retreat from a near six-month high of $1,127.50 marked on Friday.