Gold retains gains, firm above $1,200 on China rate cut
Singapore (Nov 24) Gold traded firmly above $1,200 an ounce on Monday, retaining gains from the previous
session on hopes that a surprise rate cut in China would boost demand for bullion in the top consumer.
FUNDAMENTALS
* Spot gold was steady at $1,202.20 an ounce by 0028 GMT, after gaining 0.6 percent on Friday.
* Gold got a boost from short-covering after China cut interest rates unexpectedly on Friday, stepping up efforts to
support the world's second-biggest economy as it heads towards its slowest expansion in nearly a quarter of a century, saddled under a mountain of debt.
* China's leadership and central bank are ready to cut
interest rates again and also loosen lending restrictions,
concerned that falling prices could trigger a surge in debt
defaults, business failures and job losses, said sources
involved in policy-making.
* Bullion also got support from comments from European
Central Bank President Mario Draghi that opened the door for
more drastic measures to prevent the euro zone from sliding into
deflation.
* Gold is seen as a hedge against inflation and slowing
economy.
* Hedge funds and money managers boosted their net long
position in gold futures and options in the week to Nov. 18, as
they switched to a net long in silver, the Commodity Futures
Trading Commission said on Friday.
* The Swiss National Bank on Sunday repeated its opposition
to a proposal that would force the central bank to boost its
gold reserves, with just a week to go until Switzerland votes on
the issue.
* The Dutch central bank has repatriated more than 120
tonnes of gold from vaults in the United States, it said in a
statement on Friday, in a move it believes could have "a
positive effect" on public confidence.
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MARKET NEWS
* Asian share markets followed the dollar higher on Monday
as the prospect of further policy stimulus in China and Europe
whetted risk appetites while sending the euro skidding
Source: Reuters
