Spot gold reversed early losses, putting it back on track for its best week since January 2009 as worries about the euro zone debt crisis and global growth drive investors to safe havens.
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Jose Luis Pelaez | Iconica | Getty Images |
Spot gold [XAU= 1755.50 
-10.40 (-0.59%) 
]stood at $1,765.99 an ounce by 0338 GMT, little changed from the previous close and off a session low of $1,747.54.
The precious metal dropped more than 2 percent from its record high of $1,813.79 set in the previous session, but was still headed for a weekly rise of 6.2 percent, marking its best week since January 2009.
U.S. gold [GCCV1 1764.60
13.10 (+0.75%) ] gained 1 percent to $1,768.90, on course for a sixth consecutive week of gains, matching a similar run in August 2007.
"We've seen some new investors getting in the market at high price levels," said Dick Poon, manager of precious metals at Heraeus in Hong Kong.
"People don't seem to care about prices and just want to get into safe havens."
Reuters market analyst Wang Tao expects gold to stay above Thursday's session-low of $1,732.10 per ounce.
Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust [GLD 170.75 -3.83 (-2.19%) ], dropped 1.8 percent from the previous session to 1,272.894 metric tons by Aug. 11, its biggest one-day drop since late January.
Tokyo Gold Discount Lowest in 2011
The rapid rally in gold prices over the past few days has triggered gold scrap selling in Japan, pushing the discount in Tokyo down to 75 cents an ounce below spot prices, its lowest this year, said a dealer at a large Tokyo-based bullion house.
"The general public is selling large quantities of gold scrap," said the dealer, "They are still selling today as prices are higher than last week."
-10.40 (-0.59%) ]stood at $1,765.99 an ounce by 0338 GMT, little changed from the previous close and off a session low of $1,747.54. The precious metal dropped more than 2 percent from its record high of $1,813.79 set in the previous session, but was still headed for a weekly rise of 6.2 percent, marking its best week since January 2009.
U.S. gold [GCCV1 1764.60
13.10 (+0.75%) ] gained 1 percent to $1,768.90, on course for a sixth consecutive week of gains, matching a similar run in August 2007. "We've seen some new investors getting in the market at high price levels," said Dick Poon, manager of precious metals at Heraeus in Hong Kong.
"People don't seem to care about prices and just want to get into safe havens."
Reuters market analyst Wang Tao expects gold to stay above Thursday's session-low of $1,732.10 per ounce.
Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust [GLD 170.75
-3.83 (-2.19%) ], dropped 1.8 percent from the previous session to 1,272.894 metric tons by Aug. 11, its biggest one-day drop since late January.Tokyo Gold Discount Lowest in 2011
The rapid rally in gold prices over the past few days has triggered gold scrap selling in Japan, pushing the discount in Tokyo down to 75 cents an ounce below spot prices, its lowest this year, said a dealer at a large Tokyo-based bullion house.
"The general public is selling large quantities of gold scrap," said the dealer, "They are still selling today as prices are higher than last week."
Spot gold had risen 8.5 percent so far this month, compared with a 2.6-percent drop in silver, 1-percent fall in platinum and 12-percent tumble in palladium.
The Gold premium in Hong Kong remained steady in the range of 50 cents to $1.20 an ounce over spot prices, as investment demand remained strong, dealers said.
"Investors are happy to buy gold at current levels, and we haven't seen much scrap flow on the way up," said a Hong Kong-based dealer.
The Gold premium in Hong Kong remained steady in the range of 50 cents to $1.20 an ounce over spot prices, as investment demand remained strong, dealers said.
"Investors are happy to buy gold at current levels, and we haven't seen much scrap flow on the way up," said a Hong Kong-based dealer.
Copyright 2011 Thomson Reuters. Click for restrictions.
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