Gold Inches Above $1,000, Awaits U.S. Data
Source: Reuters (10/2/09)
"Ultimately support is probably going to come around $985 on the bottom."
If non-farm payrolls come in weaker than the expected 180,000 job losses, it could renew fears about recovery in the world's largest economy and bolster the dollar, seen as a safe haven.
Gold XAU= was at $1,000.05 an ounce at 0253 GMT, up 0.2% from the notional close in New York of $998.50. U.S. gold futures for December delivery GCZ9 were at $1,001.5 an ounce, up 0.08%.
After gold's 8.7% rise in the three months to September, its strongest performance since the first quarter of 2008, it was not clear whether the precious metal can sustain a challenge of the record high of $1,030.80 per ounce from March 2008.
"After the sell-off last week it's struggling to gain traction above $1,000, as we've seen it get back and then dip twice now," said Darren Heathcote, head of trading at Investec Australia in Sydney.
He said, however, that there was fundamentally sufficient support on the downside from rising oil prices, which fans fears of inflation, and the sluggish state of the U.S. economy. "Ultimately support is probably going to come around $985 on the bottom," Heathcote said.
Others said there was insufficient support for gold from the physical side.
"Supply and demand fundamentals are capping the gold price. Scrap is becoming more available and jewelry demand goes down every time the price goes up," said Tony Parry, a gold analyst at Sydney-based Resource Capital Research.
He added: "The first quarter crisis-driven demand for gold-backed ETFs almost evaporated in the second quarter with an 88% fall in funds flow into ETFs."