Gold prices edge up as stocks rise, dollar wilts

Gold prices edged up on Thursday as well-received Chinese manufacturing data and hopes that a bailout deal for Greece may eventually be agreed boosted stocks and lifted the euro to three-week highs versus the dollar.

Prices held in a tight range, however, with trading activity expected to be light because of the U.S. Thanksgiving holiday, which has closed Wall Street.

Spot gold was up 0.13 percent at $1,730.7 an ounce at 1607 GMT, while U.S. gold was up 0.15 percent at $1,730.80.

The single currency broke higher and world stocks extended a week-long rally as manufacturing surveys in China and the United States boosted confidence over the growth outlook, while euro zone data was not as weak as some had feared.

A report showed China's manufacturing Purchasing Managers Index rose to a 13-month high of 50.4 in November, while euro zone data showed manufacturing activity slowed less than expected in November.

Daniel Briesemann, commodities analyst at Commerzbank in Frankfurt, said gold's appeal as a safe haven investment had prevented it from rising more in line with shares as the dollar weakened against a basket of currencies.

Gold's safe haven status is putting a brake on gold price risks, he said.

Saxo Bank vice president Ole Hansen said the better than expected data from China could augur well for demand from the country, which has vied with India as the world's biggest gold consumer this year, but whose gold buying has proved fragile in the face of slowing growth.

If there is a belief that China has turned the corner, there could be more physical demand, he said.

Gold's 11 percent rise this year has come largely on the back of U.S. monetary easing measures to boost its economy. It has been hovering around $1,730 this week as investors focus on whether the United States will avoid a fiscal crisis.

... contd.

Please read our terms of use before posting comments
TERMS OF USE: The views, opinions and comments posted are your, and are not endorsed by this website. You shall be solely responsible for the comment posted here. The website reserves the right to delete, reject, or otherwise remove any views, opinions and comments posted or part thereof. You shall ensure that the comment is not inflammatory, abusive, derogatory, defamatory &/or obscene, or contain pornographic matter and/or does not constitute hate mail, or violate privacy of any person (s) or breach confidentiality or otherwise is illegal, immoral or contrary to public policy. Nor should it contain anything infringing copyright &/or intellectual property rights of any person(s).
comments powered by Disqus