By: Reuters
Gold regained strength on Tuesday as bargain hunting resurfaced after prices dropped more than 2 percent in the previous session, but higher equities and easing worries about recession ![[cnbc explains]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_syuYBtGzjLe8W9Fk5fClOhG790s5E89cRSuW3RHwMqiRksLq52k-NOFdOq-9qbu1LZWEo5515kuLjaEysCN_Tv0zez3m3d3WE371DMOLEgZipK83xMKPJv1Feei9Y7e-Ta5avWsVzofCeFoagMOlTMk3L6qfleILyaVd9LTpuCMy2iNX1jDnEOl0cKtBcqew=s0-d)
in the United States could limit gains.
in the United States could limit gains.  |
Comstock Images | Getty Images |
The physical market saw demand from jewellers as prices remained below all-time highs, while main consumer India was expected to step up purchases before the wedding season starts again in September.
Spot gold [XAU= 1793.60
6.35 (+0.36%) 
]added $7.48 to $1,794.73 an ounce by 0239 GMT. Trading was volatile last week, when gold tumbled more than $200 towards $1,700 after striking a record at $1,911.46 as investors sought refuge from euro zone debt crisis, weakness in the U.S. economy and volatile currencies.
"I think you can say the market is trying to stabilise and is in some kind of consolidation mode. $1,780 is support and then $1,850 will the resistance level. There's a little bit of bargain hunting," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.
"Towards September, jewellers pick up (buying) position. Festivals give gold a little bit of support for the time being. Premium is increasing due to some demand. There's not much sales of scrap around," he added.
Hong Kong dealers quoted premiums for gold bars at as high as $1.50 an ounce to the spot London prices from $1.20 last week. Bullion markets were closed in Singapore, Indonesia and Malaysia for the Muslim Eid al-Fitr festival.
Festival season in India has started and will peak with October before tapering off in December. In India, gold jewellery is an essential wedding gift.
Physical dealers in Tokyo saw selling from local investors, but they also noted buying interest from China, where demand for jewellery increases during the Mid-Autumn festivals in September.
U.S. gold [GCCV1 1796.00 4.40 (+0.25%) ] rose $6.6 to $1,798.2 an ounce, but investors closely watched equities markets, which gained on better-than-expected U.S. consumer spending data and a bank merger in debt-ridden Greece.
U.S. consumer spending rose at its fastest pace in five months in July, a further sign the economy is not falling back into recession, although manufacturing activity in Texas almost stalled this month.
Global equities have advanced on hopes the Federal Reservemight eventually launch a third round of quantitative easing (QE3) after Fed Chairman Ben Bernanke left the door open for further action in a speech on Friday.
Spot gold [XAU= 1793.60
6.35 (+0.36%) ]added $7.48 to $1,794.73 an ounce by 0239 GMT. Trading was volatile last week, when gold tumbled more than $200 towards $1,700 after striking a record at $1,911.46 as investors sought refuge from euro zone debt crisis, weakness in the U.S. economy and volatile currencies. "I think you can say the market is trying to stabilise and is in some kind of consolidation mode. $1,780 is support and then $1,850 will the resistance level. There's a little bit of bargain hunting," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.
"Towards September, jewellers pick up (buying) position. Festivals give gold a little bit of support for the time being. Premium is increasing due to some demand. There's not much sales of scrap around," he added.
Hong Kong dealers quoted premiums for gold bars at as high as $1.50 an ounce to the spot London prices from $1.20 last week. Bullion markets were closed in Singapore, Indonesia and Malaysia for the Muslim Eid al-Fitr festival.
Festival season in India has started and will peak with October before tapering off in December. In India, gold jewellery is an essential wedding gift.
Physical dealers in Tokyo saw selling from local investors, but they also noted buying interest from China, where demand for jewellery increases during the Mid-Autumn festivals in September.
U.S. gold [GCCV1 1796.00
4.40 (+0.25%) ] rose $6.6 to $1,798.2 an ounce, but investors closely watched equities markets, which gained on better-than-expected U.S. consumer spending data and a bank merger in debt-ridden Greece.U.S. consumer spending rose at its fastest pace in five months in July, a further sign the economy is not falling back into recession, although manufacturing activity in Texas almost stalled this month.
Global equities have advanced on hopes the Federal Reserve
might eventually launch a third round of quantitative easing (QE3) after Fed Chairman Ben Bernanke left the door open for further action in a speech on Friday.The Fed is caught between a struggling recovery and high unemployment on one side, and political pressures against more monetary easing on the other. It has already pushed interest rates close to zero and bought $2.3 trillion in bonds to try to lower longer-term borrowing costs.
Analysts said anything short of a third round of quantitative easing would likely provide limited support for bullion as the Fed had already vowed to keep interest rates low into 2013.
In the energy market, Brent crude rose for a sixth straight session on Tuesday, buoyed by strong data from the United States that allayed fears the world's top oil consumer was sliding back into recession and a landmark bank merger deal in Greece.
Analysts said anything short of a third round of quantitative easing would likely provide limited support for bullion as the Fed had already vowed to keep interest rates low into 2013.
In the energy market, Brent crude rose for a sixth straight session on Tuesday, buoyed by strong data from the United States that allayed fears the world's top oil consumer was sliding back into recession and a landmark bank merger deal in Greece.
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