NEW YORK: Gold prices were little changed on Friday, Nov 19 as the euro bounced on growing confidence that Ireland's debt crisis will be resolved, but China's measures to tighten its economy kept bullion under pressure.
Bullion fell for a second consecutive week as the metal was caught up in broad-based selling, along with other commodities, by investors' need to liquidate positions amid increasing margin calls.
A financial aid plan to help Ireland cope with its battered banks will be unveiled next week, European Union sources said on Friday, but experts warned a rescue may not be enough to prevent contagion to other euro zone members.
"The sense of calm that has returned today and yesterday is taking away any safe-haven bid that may have emanated from the potential crisis," said Tom Pawlicki, a precious metals and energy analyst of MF Global.
At the same time, speculation about a possible interest rate hike by China, a top raw materials consumer, is likely to continue to weigh on gold and other commodities.
A decision by China on Friday to raise banks' required reserve ratios may not have been expected in the commodities markets, but many investors had factored in some form of government action to sap excess liquidity.
Spot gold was up 0.1 percent at $1,353.50 an ounce at 2:13 p.m. EDT, having earlier fallen as low as $1,341.40. U.S. gold futures for December delivery settled down 70 cents at $1,352.30.
Silver rose 1.3 percent to $27.27 an ounce.
COMEX volume continued to be lighter than earlier this week, when the markets sold off. Gold futures volume was more than 20 percent below its 30-day average, while silver turnover was largely in line with its average.
The gold market stabilized as the euro inched higher against the dollar.
Hopes that Ireland was near a deal to get tens of billions of euros from its European partners and the International Monetary Fund helped push the euro above $1.37 overnight, but momentum stalled ahead of resistance around $1.3750.
"The European situation will continue to play up, which should support metals," said Saxo Bank analyst Ole Hansen.
MF Global's Pawlicki said CME Group's (CME.O) decision to raise the margins to trade soy, sugar, rice and several other agricultural commodity contracts dented buying sentiment.
Silver, gold and other precious metals sold off recently after similar margin increases by the exchange triggered heavy liquidation, Pawlicki said.
Expectations that the dollar will weaken once more is still underpinning longer-term positive sentiment toward gold, analysts said. - Reuters
Bullion fell for a second consecutive week as the metal was caught up in broad-based selling, along with other commodities, by investors' need to liquidate positions amid increasing margin calls.
A financial aid plan to help Ireland cope with its battered banks will be unveiled next week, European Union sources said on Friday, but experts warned a rescue may not be enough to prevent contagion to other euro zone members.
"The sense of calm that has returned today and yesterday is taking away any safe-haven bid that may have emanated from the potential crisis," said Tom Pawlicki, a precious metals and energy analyst of MF Global.
At the same time, speculation about a possible interest rate hike by China, a top raw materials consumer, is likely to continue to weigh on gold and other commodities.
A decision by China on Friday to raise banks' required reserve ratios may not have been expected in the commodities markets, but many investors had factored in some form of government action to sap excess liquidity.
Spot gold was up 0.1 percent at $1,353.50 an ounce at 2:13 p.m. EDT, having earlier fallen as low as $1,341.40. U.S. gold futures for December delivery settled down 70 cents at $1,352.30.
Silver rose 1.3 percent to $27.27 an ounce.
COMEX volume continued to be lighter than earlier this week, when the markets sold off. Gold futures volume was more than 20 percent below its 30-day average, while silver turnover was largely in line with its average.
The gold market stabilized as the euro inched higher against the dollar.
Hopes that Ireland was near a deal to get tens of billions of euros from its European partners and the International Monetary Fund helped push the euro above $1.37 overnight, but momentum stalled ahead of resistance around $1.3750.
"The European situation will continue to play up, which should support metals," said Saxo Bank analyst Ole Hansen.
MF Global's Pawlicki said CME Group's (CME.O) decision to raise the margins to trade soy, sugar, rice and several other agricultural commodity contracts dented buying sentiment.
Silver, gold and other precious metals sold off recently after similar margin increases by the exchange triggered heavy liquidation, Pawlicki said.
Expectations that the dollar will weaken once more is still underpinning longer-term positive sentiment toward gold, analysts said. - Reuters
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