Gold quarantined at US$332 in Asian afternoon
Thu April 24, 2003 02:50 AM ET
HONG KONG, April 24 (Reuters) - Spot gold meandered in a narrow range in light trade in Asia on Thursday, with most investors on the sidelines, seeking a clearer view of the U.S. economy and the dollar before buying back gold positions, dealers said.
"The war is over, and the market's focus is on the dollar, rates and economic growth," said Gordon Cheung, director of Precious Metals at Mitsui Bussan in Hong Kong.
Spot gold was trading at US$332.20/2.70 an ounce at 0600 GMT, a touch higher than Hong Kong's open at US$332.00/2.50 an ounce and New York's last US$331.25/2.00.
Funds and other investor groups were seeking a clearer picture of primary markets, such as equities and currencies, before taking up new positions in precious metals, Cheung said.
On Thursday, the benchmark Nikkei 225 edged higher to 7,844 points by mid-afternoon, tracking Wall Street's positive performance on Wednesday.
The U.S.-led military force in Iraq appeared to be making more, albeit small, progress in stabilising the society, but had so far failed to advance its request that the United Nation's lift trade sanctions against the oil-rich country.
Trading activity in financial markets in Asia, including precious metals, continued to decline, dealers said.
It was difficult to say what were the chief reasons for the slump, but the Severe Acute Respiratory Syndrome (SARS), the flu-like virus, which has killed more than 200 people in Hong Kong and China and infected thousands was one reason.
But the World Bank in its latest report on East Asia for 2003 and 2004, issued on Thursday, said the region's economies would grow at robust rates of 5.0 percent in 2003 and by 6.0 percent next year, because the adverse effects of the Iraq war, SARS and other external shocks would be limited.
Amidst the uncertainty, the Japanese yen traded in a wide range against the dollar, strengthening at one point to 119.76 yen to the dollar.
The move put downward pressure on the Tokyo Commodity Exchange where the spot month contract was expiring on Thursday.
Trade in the benchmark contract, February contract was robust. It tumbled 13 yen to 1,277 yen on trade of 52,000 contracts.
Tael gold , which is traded on the Chinese Gold and Silver Exchange, ended the morning session at HK$3,074, lower than the open at HK$3,082 a tael in Hong Kong. A tael is equal to 1.2 ounces.
Spot silver was trading a touch lower at US$4.59/4.61 an ounce at midday, down from the open at US$4.60/4.62.
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