Spot gold in Hong Kong fell below $780/oz Tuesday morning. At the start
of the trading session, the precious metal was hovering around $778/oz,
down from $788/oz at Monday's close.
Gold inherited the weaker level from the New York trading session Monday,
traders in Hong Kong said. Most participants were seen liquidating during the
New York trade ahead of the Thanksgiving holiday on Thursday, one trader said.
"Although the yen weakened against the US dollar and the oil price remained
strong during the New York trade, participants were selling their positions on
the back of the holiday," the trader added. Despite the softer gold price, the
trader said most participants would rather stay on the sidelines. "The current
level should attract some bargain hunters but most participants were adopting
a wait-and-see attitude on the back of weaker US stock markets," he added.
Another trader concurred, noting that the US dollar fell against the Yen
in Monday's early trade, on carry trade squaring amid worries about global
financial markets. In New York, the US dollar opened lower at Yen 110.24 from
Yen 110.82 at Friday's close, while the euro fell to $1.4646 from $1.4659. The
US dollar fell further on the back of losses in US stock prices, and closed at
Yen 109.85 and $1.4669 per euro.
The New York Dow Jones Industrials index closed 218.35 point lower at
12,958.44 after Goldman Sachs downgraded Citigroup's ratings. The NASDAQ
Composite Index closed 1.66% lower at 2,593.38. December gold closed $9/oz
lower at $778/oz on risk aversion. January crude oil closed 80 cents/barrel
higher at $94.64/b on worries about US dollar weakness.
"Asian participants were seen liquidating their positions in the Asia
morning. There was also some buying at current level," the first trader said.
He expected spot gold trade to remain slow in the afternoon with Asian
participants staying on the sidelines, waiting for London to come in.
Meanwhile, gold futures, both standard contracts of 1 kg and mini gold
contracts of 100 g gold bars, trading on the Tokyo Commodity Exchange, tracked
spot gold's dip below $780/oz, and fell in the morning trading session.
The December 2007-October 2008 standard contracts lost Yen 53-62 (48-57
cents)/g, settling at Yen 2,744-2,767/g. Turnover totaled 56,646 contracts, up
from 45,784 contracts Monday.
The December 2007-April 2008 mini gold contracts of 100 g gold bars
dropped Yen 46-75/g settling at Yen 2,726-,2,754/g. Turnover was 1,924
contracts, up from 1,098 contracts Monday.