Friday, May 10th, 2013

Steadier dollar and firmer equity markets weighing on the mood.

Tuesday morning the spot gold fell back in Europe, with business levels and interest reverting to normal after Monday's UK holiday but a steadier dollar and firmer equity markets weighing on the mood, traders said. The dollar pushed up against the euro to around 1.3075, having touched 1.3064 at one stage, while global equity markets, based on the MSCI index, were at their highest for around five years. "Overall risks remain skewed to the downside for the time being. Only a move back above the trend support at $1,520 would signal some improvement in the technical picture," a broker said.

Spot gold was quoted at $1,459.75/1,460.55 per ounce, down from the close on Monday at $1,470.55. On Friday it had been as high as $1,488.15, its best for around two weeks. But this lowering of investor holdings is being partly offset by the upturn in Asian physical demand that was sparked by the early-April price collapse, while monetary easing is also a support factor. "Given these crosscurrents in gold at the moment, there is not enough incentive to materially alter fragile sentiment, and pursue either direction with strong determination for now," a broker said.

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