Gold ticks up on bargain hunting

By Lewa Pardomuan

SINGAPORE (BestGrowthStock) – Gold regained some ground on Monday, pushed around by a volatile euro, with worries about Europe’s debt woes underpinning sentiment after Fitch downgraded Spain’s credit rating.

Volume was thin as the United States and the UK are on holiday on Monday but dealers expected bargain hunters to support prices. Gold hit a record of $1,248.95 in mid-May on fears euro zone credit problems were spreading.

Spot gold hit an intraday low around $1,209 an ounce before bouncing to $1,213.90, up $1.15 from New York’s notional close on Friday. U.S. gold futures for August delivery added $1.1 an ounce to $1,216.1 an ounce.

“There is a chance for some wild movements if you get a bit of volume come in, but for the time being I wouldn’t expect too much,” said Darren Heathcote, head of trading at Investec Australia in Sydney, adding that bullion would be looking at currencies for direction.

The world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings were unchanged at a record of 1,267.930 tonnes as of May 28.

The euro inched up to $1.2325, holding above a four-year low of $1.2143 hit this month, but the currency was still on track for its biggest monthly drop since January 2009, while Asian stocks were eyeing their worst month since October 2008.

Fitch cut Spain’s credit rating by one notch to AA-plus on Friday, saying the country’s economic recovery will be “more muted” than the government forecast due to its austerity measures.

“The question remains as to what will happen to this metal in the currently opaque scenario,” Heraeus Precious Metals said in a weekly report.

“The charts are of little help at the moment, even though gold finds itself in a short-term upward trend that could theoretically see it touching $1,230 an ounce. On the other side, it will get critical once the $1,200 mark is broken.”

Oil prices rose above $74 a barrel in thin trade, although worries about euro zone economic stability fueled the worst monthly loss for the commodity since December 2008. (O/R: )

Stock Today

(Editing by Michael Urquhart)

Gold ticks up on bargain hunting