SINGAPORE, May 27: Gold prices held firm on Monday after recording their best week in a month as the dollar slipped and global stock markets fell on speculation the United States would soon start to curb measures to stimulate the economy.
FUNDAMENTALS
* Spot gold had dropped 0.03 percent, or 36 cents, to $1,385.19 an ounce by 0016 GMT, not far from two-year lows of $1,321.35 seen in mid-April. Gold is headed for its fifth straight monthly drop.
* U.S. Gold eased 0.14 percent to $1,384.6.
* U.S. And European shares marked their first weekly decline in five weeks last week after testimony by Federal Reserve Chairman Ben Bernanke sparked speculation the U.S. central bank would soon trim its support for the economy.
* That boosted the safe-haven appeal of bullion, which marked its biggest weekly percentage gain in a month.
* It was also supported by St. Louis Fed President James Bullard’s comments that U.S. Inflation would have to pick up before he voted to scale back stimulus. Gold is often bought as a hedge against rising prices.
* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.24 percent to 1016.16 tonnes on Friday – the lowest in more than four years.
* Gold prices are looking even more vulnerable after April’s price crash, as rampant inflation expected from successive rounds of monetary easing fails to materialise.
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MARKET NEWS
* The dollar index slipped further after posting its worst week against the yen in a year on Friday.
* Japan’s Nikkei share average fell on Monday morning, and could endure another volatile session as investors remained on edge after last week’s turbulent trade that drove the market to its worst one-day loss in two years. (agencies)
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